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Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's uplifting perspective on world, national, and local politics.

Monday, August 5th, 2013

Jeff Bezos agrees to buy The Washington Post and its other D.C. area papers for $250 million

Wow. Did­n’t see this com­ing:

The Wash­ing­ton Post Com­pa­ny (NYSE: WPO) announced today that it has signed a con­tract to sell its news­pa­per pub­lish­ing busi­ness­es, includ­ing The Wash­ing­ton Post news­pa­per, to Jef­frey P. Bezos.

The pur­chas­er is an enti­ty that belongs to Mr. Bezos in his indi­vid­ual capac­i­ty and is not, Inc.

“Every­one at the Post Com­pa­ny and every­one in our fam­i­ly has always been proud of The Wash­ing­ton Post — of the news­pa­per we pub­lish and of the peo­ple who write and pro­duce it,” said Don­ald E. Gra­ham, Chair­man and CEO of The Wash­ing­ton Post Company.

“I, along with Katharine Wey­mouth and our board of direc­tors, decid­ed to sell only after years of famil­iar news­pa­per-indus­try chal­lenges made us won­der if there might be anoth­er own­er who would be bet­ter for the Post (after a trans­ac­tion that would be in the best inter­est of our share­hold­ers). Jeff Bezos’ proven tech­nol­o­gy and busi­ness genius, his long-term approach and his per­son­al decen­cy make him a unique­ly good new own­er for the Post.”

“I under­stand the crit­i­cal role the Post plays in Wash­ing­ton, DC and our nation, and the Post’s val­ues will not change,” said Mr. Bezos. “Our duty to read­ers will con­tin­ue to be the heart of the Post, and I am very opti­mistic about the future.”

Bezos is one of Amer­i­ca’s best known tech­nol­o­gy CEOs. He found­ed in his garage near­ly twen­ty years ago and has over­seen the com­pa­ny’s growth from a small tech start­up into the world’s fore­most elec­tron­ic retail­er. Ama­zon is one of the Pacif­ic North­west­’s largest pub­licly trad­ed com­pa­nies, with a mar­ket cap­i­tal­iza­tion of $139 bil­lion, $66.85 bil­lion in annu­al rev­enue and 88,550 employees.

Bezos is also one of Wash­ing­ton’s wealth­i­est men. His net worth, as of 2013, is esti­mat­ed to be $25.2 bil­lion. Con­sid­er­ing how large his for­tune is, the price he is pay­ing to acquire The Wash­ing­ton Post and oth­er D.C. news­pa­pers does­n’t seem that high. Accord­ing to a SEC fil­ing spot­ted by Alex Wil­hem of TechCrunch, Bezos’ pur­chas­ing enti­ty (Explore Hold­ings) won’t be respon­si­ble for the pen­sions of for­mer Post employ­ees. So that makes the acqui­si­tion some­what sweet­er for him.

The big ques­tion on the minds of many seems to be: What does Jeff Bezos want with a ven­er­a­ble, strug­gling dai­ly news­pa­per com­pa­ny and its print empire? And what led the Post’s board to con­clude Bezos was the right man to sell the crown jew­el to? (Clear­ly, they’re impressed by his busi­ness acu­men; but Bezos has­n’t been known as some­one inter­est­ed in news­pa­pers or the news busi­ness).

The Post’s Wonkblog writ­ers, for­tu­nate­ly, have had a lot to say about how they feel about the sale, and their com­men­taries have been the best I’ve seen so far.

Also worth read­ing are state­ments by Bezos and the Grahams:

And the Post’s reporters have put togeth­er a num­ber of arti­cles about the sale.

The Wash­ing­ton Post Com­pa­ny is retain­ing a num­ber of pub­li­ca­tions and oth­er assets that will not be sold. These include Slate, Kaplan, CableONE, Social­Code, and WaPo Labs. The Com­pa­ny announced that it antic­i­pat­ed renam­ing itself in light of the sale of The Wash­ing­ton Post and oth­er D.C. area papers to Bezos.

The sale large­ly com­pletes the Post Com­pa­ny’s trans­for­ma­tion into an edu­ca­tion­al and inter­ac­tive media busi­ness. It has been unload­ing peri­od­i­cals for years.

Ear­li­er this year, the Post Com­pa­ny sold its prin­ci­pal Pacif­ic North­west asset, The Her­ald of Everett, to Black Press of British Colum­bia. That trans­ac­tion brought an end to a thir­ty-five year relationship.

And in 2010, the com­pa­ny let go of Newsweek, which was then exper­i­men­tal­ly paired up with The Dai­ly Beast by its new own­er Bar­ry Diller.

Newsweek, sad­ly, did not fare well under Diller’s IAC. Its cir­cu­la­tion con­tin­ued to drop, lead­ing to the dis­con­tin­u­a­tion of its print edi­tion at the end of 2012.

A few days ago, IAC announced it was sell­ing Newsweek to a new own­er, IBT Media, which pub­lish­es the Inter­na­tion­al Busi­ness Times.

The sale to Bezos at least keeps The Wash­ing­ton Post and its fam­i­ly of D.C. area news­pa­pers out of the hands of a tru­ly unde­sir­able own­er, like media baron Rupert Mur­doch, who is report­ed­ly try­ing to get his hands on the Los Ange­les Times and Chica­go Tri­bune (as are the ultra­wealthy and ultra­con­ser­v­a­tive Koch brothers).

The sale also ends sev­er­al decades of own­er­ship of The Post by the Gra­ham fam­i­ly, although for now, the paper’s cur­rent exec­u­tive team is expect­ed to stay on.

Bezos is not the only bil­lion­aire who has become inter­est­ed in buy­ing news­pa­pers late­ly. Boston Red Sox own­er John Hen­ry agreed to buy the Boston Globe from the New York Times Com­pa­ny for $70 mil­lion a few days ago, and War­ren Buf­fett has been buy­ing up small town papers by the region­ful.

Buf­fet­t’s com­pa­ny, Berk­shire Hath­away, is the Post Com­pa­ny’s largest share­hold­er, and stands to prof­it from the sale to Bezos.

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