The Washington Post Co. narrowed its the list of suitors for Newsweek magazine down to to buyers,  by rejecting two bidders that didn’t fit the ideological profile.

From the NY Times

The Washington Post Company, which put the magazine up for sale in May after efforts to stem its financial losses failed, has rejected overtures from the owners of Newsmax, the monthly conservative magazine, and Thane Ritchie, an Illinois hedge fund manager, according to people familiar with the bidding who spoke anonymously because the process is intended to be confidential.

Two wealthy businessmen are moving ahead with their bids: Sidney Harman, the audio equipment magnate, and Fred Drasner, a former publisher of The Daily News of New York.

Mr. Drasner’s spokesman confirmed his interest in the magazine on Wednesday. “He is expected to make a bid before the deadline,” the spokesman, Ken Frydman, said.

Mr. Harman said in a telephone interview on Wednesday that he was deeply interested in the civic function a newsmagazine provides and intended to make an offer on Wednesday.

“I wish it were healthier,” Mr. Harman said, referring to the magazine. “But setting that aside, it represents for me a synthesis of virtually everything I’ve been interested in throughout my life.” He declined to say how much he would bid.

Those people familiar with the process said that there were about a dozen interested parties that had considered bidding on Newsweek. It remained unclear how many of them would submit an offer by the deadline. And even once it passes on Thursday, a bidder could always emerge and upend the process, as was the case when Bloomberg L.P. bid for BusinessWeek last year.

With no shortage of interested parties, the issue for the Post Company has become whether it can find a new owner that the company’s chairman and chief executive, Donald E. Graham, believes will be a suitable steward for the magazine.

That is the main reason the Post Company decided not to entertain offers from Newsmax or Mr. Ritchie, according to these people. The conservative political ideology of Newsmax’s chief executive, Christopher Ruddy, is at odds with the editorial bent of Newsweek, which strives to be apolitical in its news coverage though is often criticized as left-leaning.

And Mr. Ritchie, who unsuccessfully tried to buy the Sun Times Media Group last year, is viewed as more libertarian in his political views. He has explored creating a third political party in Illinois with supporters of Ross Perot.

Mr. Ritchie’s spokesman, Justin Meise, would not comment on why Mr. Ritchie was no longer in contention to buy Newsweek except to say, “he won’t be participating in the final bid process.”

A spokesman for Newsmax said the magazine would not have a response until Thursday.

It was never clear to me why Newsmax wanted to buy Newsweek anyway.  The magazine has been a money pit for the Washington Post Co. for years and it’s in an industry that is struggling to retain readers and advertisers.

But the rejection of both Newsmax and Mr. Ritchie on ideological grounds violates the fiduciary duty that the Washington Post Co. honchos have to their long suffering class B shareholders to squeeze the maximum value out of the magazine.

Maybe neither Newsmax or Mr. Ritchie would have been the top bidders in the end but the magazine didn’t exactly attract a flood of interest and eliminating two of the bidders on non-financial grounds  is not exactly a sound business practice.

Graham can get away with this heavy handedness because the Post has a dual class stock system where family members and company executives control a majority of the voting shares and public shareholders have little say over the company’s operations.

If there is a silver lining to this decision it is the fact that the Post and Newsweek can no longer attempt to claim that they are politically neutral no matter how hard they try from now on.

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