Bloomberg is to buy BusinessWeek from McGraw-Hill, in a deal that is anticipated to close by December 1, reported BusinessWeek. It is thought that Bloomberg has made a cash offer in the $2 million to $5 million range, and has agreed to assume liabilities, including potential severance payments. The news weekly magazine has been losing between $20 million and $40 million a year, according to AllThingsDigital.
"The BusinessWeek acquisition will yield huge benefits for users of the Bloomberg terminal, for our television, online and mobile properties," Daniel L. Doctoroff, president of Bloomberg LP, said in a press release. "We couldn't be more excited...We are not buying BusinessWeek to gut it. We are buying it to build it."
Some layoffs amongst BW's 400 plus staff are expected, however, and staff have been assured that they will receive the same severance package as they would have under McGraw-Hill.
As BusinessWeek pointed out, buying the magazine will be Bloomberg's first ever major acquisition. It will bring the company closer to consumer-focused media, and will give Bloomberg access to a much larger business audience.
Norman Pearlstine, who has worked at Time Inc. and the Wall Street Journal and who joined Bloomberg last year as chief content officer, will become chairman of BusinessWeek. Top Bloomberg executives are to address BW staff this morning.
Bloomberg recently announced the addition of feeds from the New York Times and other newspapers to its Professional service, seemingly in an attempt to persuade customers that it is still worth paying $1,600 a month for use of the Bloomberg Terminal. An acquisition of BusinessWeek can be seen in a similar context, and reflects Bloomberg's determination to expand.