Newsweek's publisher said on Thursday the company's shareholders had resolved their legal disputes and one co-owner, Johnathan Davis, announced he had left the Olivet Christian sect which had been embroiled in the litigation.
The announcement of a settlement and Davis's severing of ties with the World Olivet Assembly appear to end a long spell of turmoil for 90-year-old Newsweek. Disciples of controversial sect leader David Jang had sought to bring the publication under their control through a flurry of legal actions that the company countered with its own suits against Jang, Olivet and other groups associated with the Korean-American pastor.
"On the advent of Newsweek's 90th anniversary, it's heartening to know that the litigation is now behind us," Newsweek CEO Dev Pragad was quoted as saying in a statement.
Newsweek did not set out the terms of the settlement nor respond to a request for comment on the details. IBT Media, one of the Jang-affiliated companies involved in the litigation, said it intended to fight on in court.
Founded in 1933, Newsweek has faced a turbulent start to the 21st century. Sold in 2010 for a dollar–and tens of millions of dollars in liabilities–by longtime owners the Washington Post Company, it went through a series of owners. The publication repeatedly came close to folding before a revival in recent years with a digital strategy that made it a case study for Harvard Business School.
The legal disputes erupted when Pragad, who like Davis owns 50 percent of the company, left Olivet last year. He said at the time that he wanted to protect the company and its newsroom from followers of Jang, some of whom have been in trouble with law enforcement for years and are now under criminal investigation by the Department of Homeland Security.
Jang's disciples have repeatedly tried and failed to shut down the Newsweek newsroom's reporting of Olivet's legal troubles, and the disputes have threatened to hobble the publication's business as long as either of its co-owners was connected to Olivet.
Davis welcomed the deal and suggested that his wife, Tracy Davis, had also left Olivet, where she had once been one of the most high-profile leaders.
"With litigation behind us, and my family having severed ties with Olivet in November 2022, the team has my full support as they pursue the next phase of Newsweek's growth." Davis was quoted as saying in the statement.
Johnathan Davis did not answer questions sent via his lawyer James Catterson of Pillsbury Winthrop Shaw Pittman LLP.
Tracy Davis also did not respond to a request for comment via Catterson. Davis was a former president of Olivet University. She stepped down from all roles at the college in November 2021, Olivet told Newsweek last year.
Olivet University did not respond to a request for comment on this story.
IBT Media, owned at the time by Johnathan Davis and Etienne Uzac, acquired Newsweek in 2013 after spells of ownership under the late electronics entrepreneur Sydney Harman and media mogul Barry Diller, and set about rebuilding its digital and print businesses. But the publication was dogged by questions over its links to the Olivet sect, not least after its offices were raided in 2018 by agents of the Manhattan District Attorney investigating a money-laundering scheme.
Uzac, Olivet University and IBT were among the people and institutions associated with Jang to plead guilty in the Manhattan DA's probe.
Amid the difficulties, Newsweek was spun off in 2018 into an independent entity owned half by Pragad, who had become CEO in 2016, and half by Davis. In the court battles of the past year, IBT Media sued to have the deal to spin off Newsweek reversed, saying it had been contrived by Jang's disciples to avoid scrutiny by prosecutors and the media. A New York court rejected the request. IBT Media said on Thursday it was pursuing an appeal and confirmed it had parted ways with Johnathan Davis.
"This is the first we are hearing of Mr. Pragad's and Mr. Davis's supposed settlement, which in any case requires court approval," said IBT attorney Michael C. Hefter of Hogan Lovells.
"Johnathan Davis is no longer affiliated with IBT Media, which is being led by Etienne Uzac, acting as its CEO. IBT intends to continue to vigorously pursue its claims to restore its rightful ownership to the Newsweek assets, including pursuing its pending appeal," he said.
Meanwhile, Olivet's legal woes have been deepening. Homeland Security Investigations raided Olivet University's main campus in the California town of Anza in April 2021, looking for evidence of money laundering, visa fraud and labor trafficking. It was raided again in November 2022, this time by education investigators in California. California's attorney general subsequently filed a complaint asking for Olivet to be shut down.
Olivet University had already been shut down in New York and has been closed or put under review in half a dozen states across America. Its sole accreditor, the Association for Biblical Higher Education, has put the university's status on review.
Despite Newsweek's legal turmoil, two Harvard Business School case studies said in 2021 that its business had succeeded in a turnaround that defied the odds of a struggling publishing industry.
"The progress of Dev and Newsweek's leadership team to revitalize Newsweek has been nothing short of remarkable," Davis was quoted as saying in the Newsweek statement.
Both Davis and Pragad said they expected the end of the lawsuits to allow the company to focus on running a publishing business.
"Pragad and Davis reiterate their support for Newsweek's mission, which is to serve the public interest by welcoming diverse voices across the political and cultural spectrum in the search for common ground and journalism that is factual and fair," the Newsweek statement said.
"Specifically, the co-owners have agreed to maintain and reinforce the current Newsweek advisory board composed of independent accomplished leaders from Publishing, Management Consultancy, and Technology, which serves the organization as a guiding consultative entity assisting in governance, management, and thought leadership."
