Magazine for Sale

The death of famed Yachtsman Vincent Astor in 1959 put a large question mark over the future of Newsweek magazine. In his will Astor left his controlling 60% of Newsweek's stock--177,200 shares--to the Vincent Astor Foundation, a charitable trust that he established in 1948. Since then, the rumor that Newsweek is for sale has cropped up with a persistence that has defeated the magazine's continued efforts to deny it. Last week, confronted with fresh reports, Newsweek Board Chairman Malcolm Muir, 65, said that a group of colleagues were trying to buy it.

Announced Muir: "The Newsweek management group are at present engaged in negotiating with the Astor Foundation with a view to taking over the majority interest now held by the Foundation . . . The Astor Foundation announces it is not engaged in negotiation with any other prospective buyer."

The Wrong Approach. Unmentioned in Muir's statement was the fact that the Foundation had already done some dickering with other potential purchasers. Last summer, after the Foundation's Newsweek holdings--assessed for tax purposes at $4,857,052--were made public, expanding Newspaper Publisher Samuel Newhouse (who has paid cash for most of his 14 dailies) offered to buy the Astor shares for considerably more than market value. Newhouse's offer was rejected, reportedly on the insistence of Vincent Astor's widow, Brooke Russell Marshall Astor, a member of both the Newsweek and Foundation boards. The Meredith Publishing Co. of Des Moines (Better Homes & Gardens) also made an approach, but after preliminary negotiations, withdrew without making an offer.

But, as its directors are aware, the Astor Foundation's business is charity, not magazine publishing, and Newsweek is not an investment that can be left to manage itself. Vincent Astor left Newsweek in far better shape than he found it. When he got control in 1937, the magazine had reached a circulation of 250,000, but had cost its original investors $2,250,000 in four years and was dying of malnutrition; today it has a U.S. circulation of more than 1,400,000; and last year, on an estimated total of $30 million, it netted something under $1,000,000, a slight improvement over 1959.

The Right Man. Muir and his management group face an uphill struggle to raise the $8,000,000 that the Foundation is asking for its stock--especially since they have chosen to get along without Sam Newhouse, who offered to stake them to all or any part of the money. In the meantime, if someone with the right qualifications--an outsized wallet and a desire to keep on operating Newsweek in the Astor tradition--should come along, the Astor Foundation would presumably be all ears.

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