In Covering Lawsuit Against Itself, Newsweek Downplays Unfavorable Points

On the eve of Independence Day, Newsweek published a rare, bombshell headline about itself in a July 3 story titled, "IBT Media Sues Newsweek CEO, Demanding He Return the Magazine." Newsweek Reporter Alex Rouhandeh revealed that the ownership of Newsweek assets was being legally challenged and came only hours after HNGN broke the story of the NY State Court filing and contacted a Newsweek reporter for comment. (Rouhandeh did not respond to requests for comment by publication time.)

The IBT Media lawsuit details the carefully calculated and systematic deception orchestrated by Pragad against the owners of IBT Media, and how he fabricated a carefully crafted public image as the one who 'saved the news,' replete with his fraudulent efforts celebrated as part of a Harvard case study.

"He collected false acclaim and awards and touted his claimed achievements with Newsweek in digital magazines, podcasts, and even a case study at Harvard Business School," the suit says. "And ultimately, Pragad took steps towards betraying his friends and welshing on his deal."

The article omits huge portions of the lawsuit that accuses Pragad of fraud, greed and betrayal and of weaponizing the Newsweek newsroom. Due to Pragad's allegedly repeated violations of law including "Fraudulent Inducement" -- the lawsuit seeks relief from the court that any transfer of shares to Pragad be declared "void and unenforceable." The lawsuit further seeks relief, asking the court to declare "that IBT holds title to 100% of the membership interest in Newsweek, LLC."

On behalf of Pragad, Newsweek's counsel Robert Weigel of Gibson Dunn & Crutcher LLP said, "IBT's lawsuit against Newsweek and its CEO Dev Pragad flies in the face of express written agreements. It is a desperate attempt by IBT to avoid its clear obligations and its wholly without merit." He went on to connect the issue to unrelated issues of inter-company debt, and again to Olivet University, which is not a party to the suit.

While its natural for their own lawyer to support Pragad, the story itself is written to support Pragad and downplay the suit. Despite substantial and full of never-seen before revelations about Pragad's dealings and the company's origin, Newsweek did not link to the suit directly, and instead only pointed back to past Newsweek articles that attack Johnathan Davis, the owner of Newsweek, and other entities he has distant relationships with, such as Olivet University and other entities.

Where the substance of the suit was explored, it was done in a manner that was out of context and skirted the core allegations of the lawsuit.

For instance, Newsweek states that "IBT Media sold its 50% stake in the magazine's publisher to Dev Pragad", though the sale was never consummated in the first place.

Even the opening lines of Newsweek's description takes text from the suit, reading that "this case is about the rightful ownership of the famed Newsweek brand," but abruptly ends mid-sentence omitting the crucial characterization that it is also about "Pragad's betrayal and greed."

The article then dives into a robust defense for Pragad and Newsweek, leaning on a statement "supplied" by an unnamed spokesperson at Newsweek itself. This is a common tactic for the company as it attempts to cover itself.

In an April 22 Newsweek article about Olivet, where another -- or possibly the same -- unnamed company spokesman failed to reach their own CEO, who "did not respond to comments," but was able to declare, "Dev Pragad is not a target of any federal investigation" -- something only Pragad would be able to verify.

On top of favorable spin and omission of facts, Rouhandeh and Newsweek Editor Nancy Cooper failed to check the most basic of facts before publishing the story. The article claims that IBT Media received a money-laundering charge years ago, though HNGN has confirmed that is not the case.

This follows a common pattern at Newsweek of making false allegations and influencing sources in an effort to write a story with a pre-determined narrative. As HNGN has reported before, Newsweek been accused of playing a "certain" role in swaying the New York State Department of Education in the Olivet University case, and continues to do so in other cases.

As noted in the lawsuit and by HNGN coverage, this article is one of many in a series of articles lashing out against Newsweek's owner, Davis. Newsweek's own audience, however, seems not to have been pleased with the coverage. Commentators noted that "the article was one of the worst they've seen Newsweek cover," while another mentioned that "Newsweek hasn't been good since the internet." One Newsweek reader sarcastically noted in response to the latest piece: "If you have ever seen any real news on this page, that would be breaking news."