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 Amazon.com, 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 Amazon.com 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.
- Ezra Klein: Some thoughts on The Post being sold to Amazon’s Jeff Bezos
- Jim Tankersley: Journalism needs a business model. Can Jeff Bezos find one?
- Neil Irwin: Jeff Bezos is buying The Washington Post. Here’s what that means
- Andrea Peterson: What happened when Jeff Bezos invested in Business Insider? More journalism.
- Lydia DePillis: How the Post could help Amazon
Also worth reading are statements by Bezos and the Grahams:
- Jeff Bezos on Post purchase
- Letter from Donald Graham on sale of The Post
- Katharine Weymouth’s letter to Post readers
And the Post’s reporters have put together a number of articles about the sale.
- Bezos is known for his patience
- Bezos’s buy harks back to days of the wealthy at newspapers’ helms
- A family synonymous with The Post and with Washington
- Details of Bezos’ deal to buy Post
- Post sale hailed by business leaders
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.