Sidney Harman, the stereo industry magnate who announced Monday that he was buying Newsweek magazine, has made a lot of money in his life.
Harman, who turns 92 this week, told the staff at the ailing newsweekly that he was not all that interested in making more, at least from his new acquisition.
"I'm not here to make money," he told them, according to a Newsweek published account. "I'm here to make joy."
They could use some.
Newsweek, which has about 325 employees, hasn't made a profit since 2007 and lost about $30 million last year. The magazine was put up for sale by Washington Post Co. in May.
Harman made his money in high-fidelity audio equipment built by the San Fernando Valley company he co-founded in 1953, Harman Kardon Inc., and sold under brands including Harman Kardon and JBL. He probably didn't spend much on Newsweek. Terms of the deal were not disclosed, but Newsweek reported that Harman "has agreed to pay a small amount in cash and to assume tens of millions of dollars in financial obligations."
At least he can't be labeled as old guard in publishing.
"He has no track record to go on for the media industry," said Steve Cohn, editor of Media Industry Newsletter. "Until last week, I'd never heard of him."
Harman did not respond to requests for an interview about his plans for Newsweek.
News magazines played a vital role in informing the public before the arrival of the Internet, said James McQuivey, a media analyst at Forrester Research.
"Newspapers were historically too close to the news to step back and do analysis. Monthlies missed key events in a rapid-paced world," he said. "Newsweeklies filled the gap between them."
With analysis now being provided by a multitude of websites and blogs targeting a wide range of political viewpoints, newsweeklies have struggled to reposition themselves away from the general interest niche, McQuivey said.
"In the end, it's unclear why so many newsweeklies are necessary," he said. "The Internet will sweep most of them away in due time."
Allen Weiner, a Gartner analyst, said the move by Harman has many in the industry perplexed.
"There is nothing in his background that seems to suggest that he has some magical answer to this, or knows of some business model that nobody else knows of," Weiner said. "I guess for the moment that he's willing to take on a lot of debt, which he most certainly will do. But while we all know he's wealthy, we don't really even have an idea of how deep his pockets are."
Harman Kardon was sold to Beatrice Foods in 1976 when Harman was named U.S. Deputy Secretary of Commerce under President Carter. Leaving government in 1980, he bought the company back and named it Harman International Industries Inc., serving as its chief executive until 2007. He's currently chairman emeritus of the publicly traded company, which recorded about $3 billion in sales last year.
But his personal fortune has taken hits in recent years. Although he has not had to disclose his finances, his wife — U.S. Rep. Jane Harman (D-Venice) — has, at least to some extent.
According to the Roll Call newspaper that covers Capital Hill, two accounts listed in Sidney Harman's name valued at $50 million each in a 2007 disclosure statement by the congresswoman had dropped by a combined $70 million in her report for 2008.
But there was plenty left over. Last year, Roll Call named Jane Harman the third-wealthiest member of Congress, with a net worth of at least $112 million.
Jane Harman said her career had nothing to do with her husband's acquisition of Newsweek.
"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,' " she said in a statement. "That's our rule and we stick to it."
The sale is expected to be completed by the end of September. At that point, current editor Jon Meacham will leave. Meacham is the author of the 2008 book "American Lion: A Biography of President Andrew Jackson" and several other highly regarded biographies.
He said in an e-mail to his staff when the sale was announced, "I wish Mr. Harman and his team all the success in the world."
Trent Gegax, who worked for Newsweek as a reporter and editor from 1994 to 2006, believes the magazine will need an abundance of it. Newsweek, he said, always considered itself a scrappy, lively underdog. Harman could be embracing the magazine in that tradition.
"We always kind of thought of ourselves as the Viet Cong versus the U.S. military when I was there; we were always shorthanded economically," said Gegax, who now runs an investment firm in New York. "It's an interesting play and he's trying to do a great thing. Maybe he's a romantic and thinks he can save Newsweek.
"And maybe he can, but you've got to doubt it. I doubt it."