On Aug. 5, 2013, The Washington Post’s CEO met with his staff to announce that the company had finished signing papers transferring ownership of the venerable paper to Amazon’s Jeff Bezos for $250 million.
Marty Baron, executive editor of the paper, reported that “there was an audible gasp” from the reporters who had gathered as CEO Donald Graham (son of famed publisher Katharine Graham) announced the sale of the paper to Bezos; the sale was done through his holding company, Explore Holdings, which is not to be affiliated with his Amazon empire. Although not the first significant buyout of major U.S. newspapers, this sale “shocked the media world and beyond,” according to the New York Post.
The price tag hardly made a dent in Bezos’ personal wealth, which is estimated at more than $27 billion and includes the newspaper and web properties and some smaller titles serving the D.C.-metro area. The paper’s Washington office buildings, its Kaplan education subsidiary, and other assets were not included in the sale. The Graham family had owned the Post for 80 years, and Katharine Weymouth, the paper’s publisher, explains the decision as a process: “This is a mission-driven business, and the goal is to preserve and enhance and enrich the mission, which is the journalism. And so that was what we really began to focus on was, is there an owner out there who could be a better owner for the Post in a private company, really invest in it, bring new assets to bear, and we found that in Jeff Bezos.”
In the words of Joe Esposito, media consultant: “Once upon a time, rich men purchased baseball teams. Now they purchase newspapers.”
Selecting the Right Suitor
Rick Edmonds, Poynter’s media business analyst, explains that “the Post has particular problems—intense competition on the government/politics beat, circ and ad losses typical of the biggest metros, getting the balance of local and national right and the ongoing challenge of monetizing digital traffic scattered all over the country and, to a lesser extent around the world. It is all good that Bezos respects journalism’s role, is patient and rich and is one of the sharpest digital entrepreneurs around. But I don’t think that necessarily assures success or gets him past the front door of cracking the Post’s problems.”
The Graham family had hired Allen & Co., an investment firm, to shop the paper in financial circles. The company reportedly had six interested parties, with Bezos winning the trust of the family to seal the deal. Weymouth explains that Bezos won them over as “an incredible, voracious reader. He’s famous for his reading, right? He started Amazon as a book-selling company. He was telling me that one of the ways he likes to get together with employees and get to know them is literally by doing a book club and discussing books, so he’s not a news guy per se because he hasn’t been affiliated with the news, but I know he’s a voracious reader of news and consumer of news, and that’s something I also like. At Amazon, he is relentlessly focused on the customer, and our business is the same. We are relentlessly focused on our readers and the other customers: our advertisers. And we’re only going to win, if we can serve readers content that is interesting and that is unique, and that’s what we’ve always been trying to do.”
For his part, Bezos quickly assured the Post staff members that “the values of the Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners. We will continue to follow the truth wherever it leads, and we’ll work hard not to make mistakes. When we do, we will own up to them quickly and completely. I won’t be leading the Washington Post day-to-day. ... There will, of course, be change at the Post over the coming years. That’s essential and would have happened with or without new ownership. The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about—government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports—and working backwards from there. I’m excited and optimistic about the opportunity for invention.”