Is BusinessWeek Lining Up Buyers?

Looks like someone may want to buy BusinessWeek after all. (Take that, Time's Belinda Luscombe!) According to BW's media blogger Jon Fine, his employers, the McGraw-Hill Companies, have entertained some tire-kicking from OpenGate Capital, a Los Angeles private equity firm.

What OpenGate would see in BusinessWeek and its Web sites: A good price. Last year, the company bought TV Guide for $1, the same amount that's been floated for BusinessWeek.

Since taking over TV Guide (just the magazine, not its Web site or cable channel), OpenGate installed Jack Kliger, former president and CEO of Hachette Filipacchi Media (publishers of Elle among others) as CEO after a messy departure by Scott Crystal, who told a reporter, "The [owners] are putting the business at risk by hastening the reduction of cash from a business that's losing money. It's unconscionable," as he left. The magazine cut its rate base nearly 10 percent and cut its frequency by six issues a year.

Fine also mentions Bruce Wasserstein, chairman of Lazard Frères and owner of New York Magazine, as another possible buyer. Considering the fact that he paid 15 percent more than other buyers to get his hands on New York ($55 million in 2003), maybe Wasserstein will offer McGraw-Hill $1.15 for the magazine.

Fine—who had his hands full as he juggled his own possible conflict of interest with the purchase of $4 million penthouse with his wife, Mediabistro founder Laurel Touby yesterday—notes that BusinessWeek lost "around $20 million on revenues of $147 million" last year. This year's revenue is on track at $135 million.

He noted that with cost of office rent and other overhead, the losses could double. So much for buying a whole magazine for a buck.