Amazon.com's Jeff Bezos Buys The Washington Post
UPDATED: Newspaper sold for $250 million to online shopping magnate days after the New York Times sells the Boston Globe.
Amazon.com's Jeff Bezos has agreed to buy the newspaper businesses of the Washington Post Co. for $250 million. When the deal closes in about 60 days, the billionaire entrepreneur intends to include it in his personal investment portfolio, which is unaffiliated with the giant online retailer he founded.
The sale includes the flagship newspaper, The Washington Post, founded in 1877 and perhaps best known for its Pulitzer-Prize winning coverage of the Watergate scandal in the 1970s that brought down the presidency of Richard Nixon. Other assets included in the deal include Express newspaper, the Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.
Not included in the transaction are Kaplan, Post-Newsweek Stations, Cable One, Slate Magazine, TheRoot.com, Foreign Policy, the WaPo Labs, SocialCode, an interest in Classified Ventures and some real estate assets, including the company's headquarters building in downtown Washington, DC.
The company that remains after Bezos acquires the newspaper publishing assets will change its name, though it has not yet settled on what the new name will be. Bezos could presumably retain the Washington Post Co. moniker to house the assets he is buying. He also said Katharine Weymouth, a member of the controlling Graham family, will stay on as publisher of the Washington Post. The parties also said no employees will lose their jobs because of the transaction.
Like other newspapers, the Washington Post has had a difficult time growing its finances -- or even maintaining the status quo -- as consumers have flocked to the Internet for news on-demand. In the first half of this year, circulation has fallen 7 percent and revenue at the company's newspaper publishing unit was off 2 percent compared to the same frame a year earlier. The division reported an operating loss of $49.3 million in the first six months of the year, up from an operating loss of $33.2 million in the same period a year prior.
Still, the company's shares are up 56 percent so far this year and the stock closed 2 percent higher on Monday to $568.70.
"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 Washington Post Co. and CEO Donald E. Graham in a statement. "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's proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post."
In a story about the sale, the Washington Post reported that, "With extraordinary secrecy, Graham hired the investment firm Allen & Co. to shop the paper ... Allen's representatives spoke with a half-dozen potential suitors before the Post Co.'s board settled on Bezos, 49, a legendary tech innovator who has never operated a newspaper."
"I understand the critical role the Post plays in Washington, DC and our nation, and the Post’s values will not change,” Bezos said in a statement. “Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future.”
The deal puts the newspaper with a reputation for Pulitzer Prize-winning journalism under the sole control of Bezos, who told a reporter that he would remain in Seattle and delegate day-to-day running of the paper to its existing management.
“I have a fantastic day job that I love,” he said.
The announcement comes just days after the New York Times Co. sold the Boston Globe to Boston Red Sox owner John Henry for $70 million.
The Post Co. sold Newsweek to audio magnate Sidney Harman in 2012 for $1, plus some $40 million in pension obligations. Harman merged it with Barry Diller's IAC Corp.-owned online magazine The Daily Beast, though over the weekend Diller sold Newsweek for an undisclosed amount to online publisher IBT Media.