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But with a subscription liability — money already paid for magazines not yet received — of more than $40 million, according to two people briefed on the property who would not speak on the record about a sale process that is just getting under way — Newsweek would still have to come out and be delivered for 18 months or more.
I think their primary objective [in selling] is not to see any objectives from the sale but to off-lay the subscription liability to someone else".
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It paid $1 for the magazine and assumed close to $100 million in subscription liabilities.
"We have had conversations with other publishers," Ms. Taylor said, "but no final decision has been made on how we will fulfill our subscription liabilities".
It places challenges before OpenGate, which has never owned a magazine before: the TVGuide.com Web site was not sold, OpenGate assumed $70 million to $100 million in subscription liabilities, and advertising is declining at almost every print magazine.
AOL Time Warner is to buy the magazine's paid subscriber list for $500,000, including the assumption of subscription liabilities of $2.2 million to $2.5 million.
Given the vast pension, health care and unfulfilled subscription liabilities Newsweek carries, it's more likely the magazine is headed for extinction.
Our liability to you in connection with your subscription will not exceed the total subscription fees charged for your current subscription period (being in all cases a maximum of 12 months).
Our liability to you in connection with your subscription will not exceed the total subscription fees charged for your current subscription period or, in the event of a rolling subscription, the total fees paid by you for that subscription to date.
Michael J. Klingensmith, the publisher of Entertainment Weekly, said the sale involved "cash and a not insignificant liability," a reference to unfulfilled subscriptions.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com