The New York edition of Time Out is on the auction block with a cover price of up to $40 million (£26.8 million) after backers of the weekly magazine pressed for a sale in an attempt to generate profit on their 13-year investment.

It is more successful than the original London title, with more than double the weekly circulation, but Tony Elliott, Time Out's founder, cannot afford to buy out his investment partners in the business.

He said that a sale would happen “if somebody offers a sensible sum of money - if somebody offers $10 million, it won't happen”. However, he conceded that it was a difficult time to complete a sale because the economic downturn had hit advertising at the entertainment and listings title hard.

“We don't need to sell New York, this is entirely driven by the investors,” Mr Elliott said, indicating that he was prepared to retain his investment or sell his stake in the American title if the price was high enough.

Mr Elliott founded Time Out in the summer of 1968, selling an A2-size pamphlet for a shilling. He has owned the London publication ever since and has gradually expanded the brand internationally. However, a lack of capital - partly stemming from a refusal to sell any shares in the original business - has meant that he does not own most of the international editions, which are published by third parties under licence.

New York, though, is an exception, and Mr Elliott's Time Out owns a third of the business, in conjunction with William Louis-Dreyfus, the French-American businessman, who used to run the trading conglomerate of the same name, and the Clark family estate. Their fortune stemmed from their one-time controlling interest in Singer sewing machines.

The investors put in somewhere between $10 million and $30 million - the figure has not been made public - to set up the New York title in 1995. Several attempts have been made to find a new partner over the years and Mr Elliott has never been able to generate enough profit to afford to buy them out himself.

Also for sale is Time Out New York's share of the Chicago title, meaning that any buyer would take control of the brand in the United States. The three New York shareholders own half that business, with Joe Mansueto, the founder of investment research group Morningstar, owning the rest. The most recent set of accounts for Time Out Group Ltd, the London-based holding company, show a loss of £465,000 before tax for the 11 months to December 2006, on turnover of £22.7 million. A note to the accounts says that the share of losses in New York and Chicago amounted to £81,000 in that period.

Yet Mr Elliott, a 61-year-old who also survived prostate cancer three years ago, insisted that he had no plans to sell the London title. “Advertising is down, it's a bit of a struggle, but we'll get by. I'm not going anywhere,” he said.

The auction is being handled by DeSilva+Phillips and interested parties were asked to submit first-round bids this week. A sales process will conclude early next year.

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