When Business Week continued to keep sending me its magazine edition for free for several years, followed by multiple warnings that my subscription would expire unless I paid, I knew the business model was fundamentally flawed. 

I didn't even really read it because the content was lame. And, if a publication is competing for my coffee table, it would have to, at the least, beat out Architectural Digest and the Economist. 

Anyway, it wasn't surprising therefore to see McGraw-Hill Companies announce late Tuesday that it was selling BusinessWeek to Bloomberg for an undisclosed amount. 

BusinessWeek was sinking fast. While BusinessWeek, which was founded in 1929, has a readership of some five million, its ad pages dropped 16% last year and are down 34% year-to-date. They're down 70% since 2000, according to Mike Meltz, an analyst at JP Morgan.

Overall, BusinessWeek has annual revenue of $125 million, but could be losing more than $40 million this year, Meltz estimates.

Businessweek.com pegs the selling price at $2 to $5 million cash, plus liabilities and severance costs (which is likely a healthy number into the double-digit millions) for whomever Bloomberg lays off. It's unclear how many of the 400 staffers at BusinessWeek will be let go and replaced. Most likely more of the cuts will come from administration and sales versus editorial. After all, the BusinessWeek reporters will be helping to drive traffic, which Bloomberg won't want to lose. The combined sites attract more than 20 million unique visitors monthly, 100 million pageviews and generate a combined revenue of $60 million, according to Businessweek.com. 

But one replacement that shouldn't surprise anyone is editorial management. Norman Pearlstine, Chief Content Officer at Bloomberg, and a former executive editor of The Wall Street Journal, will become chairman of BusinessWeek.

Analysis:

With the sale of BusinessWeek, following the shut down of Gourmet and Portfolio, we're experiencing magazine supernova. And, we just got started.

So, what is Bloomberg really buying? Or, what's the residual value left when a magazine dies? There's modest traffic. There's a few talented people. And, there's a huge subscriber list. At the end of the day, perhaps Bloomberg bought the subscriber list. Hence the low valuation.

But this raises a number of questions, such as how valuable is that list? After all, the subscriber list of 900,000 consisted of a number of non-payers like me, I'm sure.

Finally, what's to happen to my BusinessWeek subscription? My gut tells me that soon it will be my Bloomberg magazine subscription. And, as soon as Bloomberg figures out that BusinessWeek's circulation included a number of non-payers, my subscription will most likely end.