Business Week To Be Acquired By Bloomberg For $5 Million

One of the most respected business magazines, Business Week is in the process of being acquired by Bloomberg, according to a report run by Business Week. The acquisition has cost Bloomberg $5 million in addition to the magazine’s liabilities. As of now, Business Week’s liabilities are an estimated $32 million, out of which the liabilities shared by Bloomberg is yet uncertain.

Bloomberg is one of the biggest and most trusted name in the world of business news and data and is owned by the current New York City mayor, Michael R. Bloomberg. As per the details of the deal, Bloomberg has agreed to keep the employees of McGraw-Hill Cos., the parent company of Business Week for at least 12 months after the deal has been finalized. On the other hand, the fate of more than 400 employees of Business Week is still uncertain. Furthermore, Bloomberg has agreed to pay the severance package to McGraw-Hill, equivalent to their packages before the deal.

According to Daniel L. Doctoroff (President, Bloomberg LP),

“The BusinessWeek acquisition will yield huge benefits for users of the Bloomberg terminal, for our television, online and mobile properties. We couldn’t be more excited…We are not buying BusinessWeek to gut it. We are buying it to build it.”

One reason for McGraw-Hill’s decision to sell off Business Week, can be attributed to the magazine’s slumping sales figures and to the fact that, Business Week was losing an estimated $20-$40 million in revenues annually.

A memo from Keith Fox (Business Week) to its staff:

“All,

Moments ago, McGraw-Hill announced that Bloomberg L.P. has agreed to acquire BusinessWeek. This is exciting news on many levels. Joining forces with another of the world’s leading news organizations enhances BusinessWeek’s ability to further serve our global audience and our valued customers. And Bloomberg will gain a powerful brand with a history of editorial excellence and strong reach among business professionals.

While the ink is barely dry and the long-term plans are being worked out, we do know that Bloomberg is committed to and values our brand, our editorial integrity, and our ability to drive advertising, circulation, and new digital revenue.
BusinessWeek will strengthen Bloomberg’s online, television and mobile products and creates an opportunity for Bloomberg News to reach decision makers in the c-suite. Online, BusinessWeek.com and Bloomberg.com will have more unique visitors than any non-portal business and financial site. In addition, Bloomberg expects to build television content around the powerful BusinessWeek brand and our world-class journalists.

I am tremendously proud of the work all of you have done in the past few months. Despite the uncertainty, we have continued to produce first-class products for our readers and advertisers, and I want to thank you deeply for your efforts. I also want to thank Steve Adler, Jessica Sibley, Tania Secor, Roger Neal, and Linda Brennan, for their extraordinary ability to personify the best of BusinessWeek during the deal process while leading their respective organizations.

I know that while this announcement answers some of the questions you’ve been asking over the past few months, it raises others. The sale is expected to close by the end of the year and we will be working on transition plans in the coming weeks. I can tell you that all BusinessWeek staffers will remain employees of The McGraw-Hill Companies until the transaction closes, and that it will be business as usual–producing the magazine and the website, and serving our advertisers–through the close. We will give you more details when we can.

We’ll be holding a town hall meeting later today at 5:45 EST, after which a Q&A will be provided to all employees; you will receive more details shortly. A call for the Asia teams will be scheduled shortly.

Again, I want to thank you all for your professionalism and dedication during a challenging time. I look forward to working with you on the promising next chapter in BusinessWeek’s history.

Keith.”