Updated at 7:30 and 11:45 am, Aug. 6, with Bob Woodward and Katharine Weymouth
Eugene Meyer, a Wall Street financier, bought the Washington Post in 1933, in the nadir of the Great Depression, paying $825,000 at a bankruptcy auction.
Jeffrey Bezos, who started Amazon.com with a $300,000 loan from his parents, is buying the Post for $250 million in cash. It’s not Amazon that is buying the paper, the Post reports today, it is Bezos’s own holding company.
In the 80 years between these sales, the Post rose from a third-rate paper in a newspaper-crowded town to the dominant publication in Washington, in its heyday one of the nation’s strongest newspapers, one whose investigations toppled a president.
The story of that century in Washington is much like the story of newspapers in America. In big cities where once there was avid “read-all-about-it” competition for newspaper readers — the Evening Star, once “the newspaper of record” in Washington and the last of its evening papers, folded in 1981 — now there are stragglers of a lost art, sometimes gone bankrupt, in search of scarce readers with smartphones. The Post’s circulation is off 40 percent from its 1993 peak.
The acquisition by Bezos also inevitably raises the question about how the Post will be delivered in the future. The creator of the nation’s most ambitious online retailer will have his own newspaper. Yet he has joined those who predict newspaper printing does not have a long future. Maybe he’ll give every customer a Kindle and shut down the presses.
Under the Graham family’s ownership through three generations — Meyer’s first successor as publisher was son-in-law Philip Graham, followed by wife Katharine Graham after his death, then their son Donald Graham and now his niece Katharine Weymouth, who will remain as publisher after the sale — it became more than a newspaper. The Washington Post Co. bought TV stations and Newsweek magazine. Donald Graham remains CEO at the Post Co., which retains an educational company and the online journal Slate.com and will change its corporate name.
Newsweek, too, was sold again, this week — after the Post Co. sold it to billionaire Sidney Harman for a song. The magazine itself is gone from the news racks, readable only online.
This isn’t Bezos’s first dive into publishing. He has bought an interest in Business Insider. The world’s 16th richest person, according to the Bloomberg Billionaires Index, is paying one percent of his net worth ($25 billion) for the paper — that’s about the average daily overall fluctuation in Amazon’s stock over the past few months, Bloomberg’s Peter Cook notes.
That Insider suggests Bezos may be getting a good deal ($250 million is fire-sale terms by modern newspapers standards — though the Boston Globe has gone for $70 million, released by the New York Times Co. that paid $1.1 billion for it).
“Bezos is not taking Slate.com, just the newspaper and its web sites,” the Insider says. “But still, he’s paying $250 million for a business that has $581.7 million in annual revenues, about one-fifth of which is a $100 million-internet business which is growing.”
The Insider also offers this insight:
“Anyone rooting for the Washington Post to transform into a successful digital business should be thrilled that Jeff Bezos is buying it. (Anyone hoping the Washington Post will never change, meanwhile, should find some other status quo to cling to. The status quo at the Post is dying with or without Bezos).”
“ There will of course be change at The Post over the coming years,” Bezos wrote in a letter to the Post staff. “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.”
`It was really part of a process,” Weymouth says of the sale of her family’s newspaper in an interview on PostTV. “It wasn’t sort of one, day, `OK let’s do this’… We were very clear, Donald and I and the board, that we were not going to sell to just anyone… It was really about someone who could bring assets to bear… but also shared our values.”
“The Post is bigger than the Graham family,” she says of the paper her grandmother really made a powerhouse. “This is a transition to a good owner who has a lot he can bring to us. We were not on the auction block and just auctioned to the highest bidder.”
On the day of the sale, the news broke on Twitter before the Post published it online.
This was not a happy day in Washington. Tears were shed in the newsroom.
“It’s very sad,” Post Associate Editor Bob Woodward told The Daily Beast, a creature of the new online media.
Woodward, along with fellow reporter Carl Bernstein, led the Post to a Pulitzer Prize for their investigation of President Richard Nixon, who was forced to resign the presidency.
Woodward was looking for the bright side in Bezos’s purchase, telling the Beast: “If there’s somebody who can succeed, it’s Bezos. He’s the innovator, he’s got the money and the patience, so we’ll see. I think in some ways, this may be the Post’s last chance to survive, at least in some form of what it was.”
This morning, on MSNBC’s “Morning Joe,” Woodward was pitching an even brighter picture: “It’s sad,” he said, “but we’re in this survival game.” Bezos “has deep pockets,” he said, and “we need to be shaken up. I believe he will do that… I don’t see any downside.”
“We need a renaissance in reporting,” Woodward said, counting on Bezos to find a way to finance it. “Let’s hyper-invest.”
Current and former Postmen and others were chiming in too, on Twitter, of course.
Hard to think of WaPo w/o the Grahams. There’s no classier person in DC than Don and it was the privilege of a lifetime working for him.
— Peter Baker (@peterbakernyt) August 5, 2013
— Business Insider (@businessinsider) August 5, 2013
Key point: The Graham family shopped the Post to “a half-dozen potential suitors”: http://t.co/QsLkGc8hZT
— Ezra Klein (@ezraklein) August 5, 2013
The best part is Bezos bought @WashingtonPost using One-click on his Prime account.
— Tony Fratto (@TonyFratto) August 5, 2013
Bloomberg: over 3 mos. Bezos’s 86M Amazon shares have increased or decreased in value each day by an avg of $249 million. WaPo price: $250M
— Peter Cook (@PeterCCook) August 6, 2013