Sidney Harman, founder of Harman International Industries Inc., agreed to buy Newsweek magazine from Washington Post Co., ending a three-month bidding process for the money-losing publication.
The terms of the deal weren't disclosed. The sale will not have a material effect on Post, the company said in a statement Monday. Post will retain pension assets and liabilities and certain employee obligations.
"In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism," Donald E. Graham, chairman and chief executive of Post, said in a statement.
Harman, 91, lives in California and is married to Rep. Jane Harman (D- Venice).
"Sidney was quoted recently as saying: 'I don't tell Jane how to vote and she doesn't tell me how to run my business.' That's our rule and we stick to it," his wife said in a statement Monday. "Of course I am proud of his long and successful career and believe that Newsweek and its enormously talented workforce will be in good and caring hands."
Stamford, Conn.-based Harman International makes audio equipment, including the Harman Kardon, Infinity and JBL brands.
Harman agreed to keep most of the magazine's more than 300 employees after the sale, people familiar with his plans said. Post agreed to cover the severance costs for any Newsweek employees the buyer didn't keep, the people said.
Post said in May that it was considering selling the weekly publication it had owned since 1961. The circulation of general interest newsmagazines, including Newsweek and Time Warner Inc.'s Time, has plunged as more readers seek their news from the Web, where stories are updated more frequently.
Newsweek posted losses from 2007 to 2009 and its owner in May predicted that this year would be unprofitable too. Newsweek redesigned the magazine last year and told advertisers that it anticipated fewer guaranteed readers.
Post shares rose $13.40, or 3.2%, to $433.89. The stock has lost 1.3% this year.
Since 2007, Newsweek has lost $44 million on an operating basis, according to documents sent to prospective buyers. Print advertising revenue plunged 39% to $70.3 million last year from $115.5 million in 2008, the documents show.
Other bidders included Fred Drasner, a former executive at U.S. News & World Report and the New York Daily News, and investment firm Avenue Capital Group, people familiar with the matter said. Private-equity firm OpenGate Capital and publisher Newsmax Media Inc. also considered buying the magazine.
"I wish him the best of luck," Drasner said in an interview. "I'm pleased somebody is going to devote this amount of resources to preserve serious journalism."