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IAC (NSDQ: IACI) CEO Barry Diller told investors this summer that the company could tolerate the continued losses at the combined Newsweek/Daily Beast, but it looks like patience is wearing thin. The NYT reports that the magazine’s publisher and two top executives are no longer with the company.
After less than a year as publisher, Ray Chelstowski was “relieved of his duties” today, as the NYT put it, citing unidentified sources. Also, Tom Weber, the managing editor, and Edward Felsenthal, the executive editor who has been with The Daily Beast since Tina Brown introduced the online-only title three years ago, both resigned.
Chelstowski has been credited with revitalizing Time (NYSE: TWX) Inc.’s Entertainment Weekly. But with so much turnover following the sale of Newsweek to the late Sidney Harman in September 2010 for $1 (plus $47 million in liabilities), advertisers and readers have continued to retreat from the magazine.
Chelstowski is being replaced by Eric Danetz, who is joining the magazine as SVP for sales from CBS (NYSE: CBS) Interactive.
Overall, IAC posted a pretty good Q3 two weeks ago. But the media segment, which contains Newsweek/Daily Beast, saw revenues drop 37 percent year-over-year. As the economy remains mired in uncertainty, and magazines, at best, are only holding their collective heads above water these days, Newsweek/Daily Beast is unlikely to do anything more than continue to try IAC’s and its shareholders’ degree of indulgence.
As the latest figures from the Publishers Information Bureau show, Newsweek’s ad pages were down 22 percent between January and September when compared with the same period the previous year. In contrast, its closest rival Time, posted a 4.2 percent increase during that same period.