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CNBC Correspondent
The much-anticipated deal has been done: McGraw Hill [MHP
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] announced Tuesday afternoon that it will sell the 80-year-old weekly magazine to Bloomberg. The terms of the deal, expected to close this year, weren't disclosed, but Business Week itself reports that the cash offer is between $2 million and $5 million and it includes Bloomberg assuming liabilities.
This acquisition is pretty unprecedented for Bloomberg, which has a 28-year history of growing organically rather than buying companies. If the deal goes through as planned, Bloomberg will be the proud owner of content that attracts some 4.8 million weekly readers from 140 countries. The bad news is that the magazine suffered a 30 percent decline in ad sales in the second quarter, far more than the 22 percent drop the magazine industry as a whole suffered that quarter.
This seems to be part of Bloomberg's broader push into more accessible, consumer-friendly business coverage, a dramatic shift from a company that's built on the business of leasing sophisticated data terminals to Wall Streeters. Tuesday's announcement follows the news earlier this month that Bloomberg and the Washington Post [WPO
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] are teaming up to launch a news service focused on business and political news, natural bedfellows. Bloomberg recently added a live feed from the New York Times breaking news to its subscriber service. And the company has invested millions in freshening up its TV channel, making it less number-crunchy and data-driven. Exclusive access to Business Week's content and journalists should help with that.
Alone the magazine is bleeding ad pages and a liability to McGraw Hill. As part of Bloomberg it's a way to reach a new kind of reader. Still, Bloomberg will have to fight the decline in ad pages. But using the magazine as part of a larger strategy, the company probably doesn't care.
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