Chen Weihua

Newsweek bid premature move

By Chen Weihua (China Daily)
Updated: 2010-06-22 07:00

Southern Daily Group's bid for Newsweek magazine was a good try. It was a premature effort that was doomed to fail. An early rejection by Newsweek's owner Washington Post Co was not entirely unexpected.

The Chinese partners involved, including B-raymedia, which owns several metro papers, must have known this beforehand. But no one knows whether they made the move simply to generate a buzz that would have boosted their reputation.

The US news media, which is keenly tracking the fate of the 77-year-old Newsweek since it was put up for sale in early May, has paid much attention to domestic buyers, and almost no attention at all to bidders from abroad. Few would like to think of Newsweek falling into the hands of a foreigner.

Most eyes have been on three US bidders, namely hedge fund manager Thane Ritchie, buyout shop OpenGate Capital and publisher Newsmax Media.

OpenGate Capital, which bought TV Guide for $1 two years ago, announced last week that the publication is now profitable.

The conservative nature of some possible buyers, such as Newsmax, which owns right wing publications, has made many readers as well as Newsweek staff worry about the future of the liberal weekly. But some argue it might be better for the left-leaning magazine to tilt a bit towards the central right.

Whether Newsweek will be left, central, right or far right in future, the shock wave would have been nothing compared to the one if the magazine were to have been sold to an investor from the Chinese mainland.

You can be sure to expect a stronger reaction from the American public than the one in the late 1980s when the Japanese bought Rockefeller Center in New York and Columbia Pictures in Hollywood.

Despite the growing number of mergers and acquisitions by Chinese businesses in the US, buying a leading news magazine whose product has reflected American values and ideas for decades would have been a totally different story.

It would have been more of an uphill battle than the failed bid for Unocal by the China National Offshore Oil Corp (CNOOC) five years ago. The impact would also have been much larger than some pricey deals, such as Geely's $1.8 billion purchase of Ford's Volvo brand in March this year.

In editor Jon Meacham's words a month ago, Newsweek will remain a 'catcher in the rye' standing between democracy and the abyss of ignorance and despair. Newsweek is a business - an odd one, to be sure, and one with a significant sense of itself as a public trust - but it is still a business.

Money may not be that much of an issue for Chinese investors, regardless of the fact that Newsweek has posted an operating loss of more than $41 million in the last two years.

But any likely purchase of Newsweek by a Chinese firm would have immediately turned into a political issue in the US, given the two nations' vastly different ideological and political systems.

Would Newsweek, for example, have continued carrying biased or unbiased stories about China, or on other sensitive issues, stories that most Chinese news media would shy away from? That would have also been highly unlikely under the current press and publication regulatory regime in China.

Southern Daily Group, which owns some well-respected newspapers, may not have been able to escape this fate and to maintain the editorial integrity of Newsweek.

It would have also been highly unlikely for any Chinese investor to convince millions of current Newsweek readers to keep patronizing the publication.

If there is a so-called Chinese wall in the business world, the wall is then much higher in the news media sector due to the huge political, social and cultural differences between the two nations.

I am not a pessimist, but tearing down that wall will be a prolonged process and requires lots of patience. Until then, the conditions are not ripe for Chinese to endeavor to acquire major US news media.

E-mail: chenweihua@chinadailyusa.com