Aug. 6: The Washington Post, the newspaper whose reporting helped topple a President and inspired a generation of journalists, is being sold for $250 million to the founder of Amazon.com, Jeffrey P. Bezos, in a deal that has shocked the industry.
Donald E. Graham, chairman and chief executive of The Washington Post Company, and the third generation of the Graham family to lead the paper, told the staff about the sale late on Monday afternoon. They had gathered together in the newspaper’s auditorium at the behest of the publisher, Katharine Weymouth, his niece.
“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),” Graham said in a written statement.
In the auditorium, he closed his remarks by saying that nobody in the room should be sad — except, he said, “for me.”
The announcement was greeted by what many staff members described as “shock”, a reaction shared in newsrooms across the country as one of the crown jewels of newspapers was surrendered by one of the industry’s royal families.
In Bezos, The Post will have a very different owner, a technologist whose fortunes have risen in the last dozen years even as those of The Post and most newspapers have struggled.
Through Amazon, the retailing giant, he has helped revolutionise the way people around the world consume — first books, then expanding to all kinds of goods and more recently in online storage, electronic books and online video, including a recent spate of original programming.
In the meeting, Graham stressed that Bezos would purchase The Post in a personal capacity and not on behalf of Amazon, the company. The $250 million deal includes all of the publishing businesses owned by The Washington Post Company, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.
The Washington Post Company plans to hold on to Slate magazine, The Root.com and Foreign Policy. According to the release, Bezos has asked Weymouth to remain at The Post along with Stephen P. Hills, president and general manager; Martin Baron, executive editor; and Fred Hiatt, editor of the editorial page.
Bezos, who did not attend the meeting at The Post on Monday, said in a statement that he had known Graham for the past decade and said about Graham that “I do not know a finer man.” Weymouth said that in negotiating this deal, Bezos made it clear he was not purely focused on profits.
The sale, at a price that would have been unthinkably low even a few years ago, represents the end of eight decades of ownership by the Graham family since Eugene Meyer bought The Post at auction on June 1, 1933. His son-in-law, Phillip L. Graham, served as president of the paper from 1947 until his death in 1963. Then Graham’s widow, Katharine Graham, oversaw the paper through the publication of the Pentagon Papers alongside The New York Times and its coverage of Watergate, the political scandal that led to the resignation of Richard Nixon and also a starring role for the newspaper in the film, All The President’s Men.
The Post’s daily circulation peaked in 1993 with 832,332 average daily subscribers, according to the Alliance for Audited Media. But like most newspapers, it has suffered greatly from circulation and advertising declines. By March, the newspaper’s daily circulation had dropped to 474,767.
The company became pressed enough for cash that Weymouth announced in February that it was looking to sell its flagship headquarters. According to a regulatory filing associated with the sale, Bezos will pay rent to The Post Company on the space for up to three years.
As of 2012, the newsroom, which once had more than 1,000 employees, had fewer than 640. People there on Monday described the mood as “sombre” with “a lot of people kind of in disbelief.”
In an interview in July, Graham was cagey about the family’s future in the business. “I’ll just fall back on the same answer,” he said, adding, “In family companies you have judgements about the family and you have professional judgement. The family control of The Washington Post Company over the years, I think, has been a healthy thing.”
In an e-mail on Monday, Weymouth, who replaced her uncle as publisher in 2008, talked about the effect of the sale on her family: “Yes — we knew the sale was coming. This was a process that was months in the making. It is, of course, sad for the family — we have been incredibly honoured to have been a part of The Post for the past 80, but we have always understood that this is a public trust and our focus was on ensuring that it would remain strong for generations of readers to come.”
The Post is not the only newspaper to move to new ownership. The New York Times Company announced early Saturday morning that it had sold its New England Media Group, which includes The Boston Globe, for $70 million, a fraction of the $1.1 billion the Times company paid for just The Globe in 1993.
Ken Doctor, an analyst at Outsell, said that The Post sale reflected a broader trend of newspaper ownership returning to local investors rather than large, publicly traded enterprises.
“Newspapers are not really much creatures of the marketplace anymore,” said Doctor. “They’re not throwing off much in profits. They need shelter from the pressure of quarterly financial statements and reports.”
Newspaper analysts also said that the sale seems to be good news for the future of The Post. Alan D. Mutter, a newspaper consultant who writes the blog Reflections of a Newsosaur, said that for the first time someone with a native digital background was purchasing a major newspaper rather than an old-time businessman who would try to restore The Post to its earlier heyday and treat it “like 1953 Plymouths in Cuba.”
While Bezos may be purchasing The Post separate from Amazon, Mutter predicted that there could be collaborations between the brands, like The Post’s content appearing on every Kindle or Post video content appearing on Amazon.
“This is a guy who literally has invested in building rockets because he thinks it’s a good idea. I believe he’s bought the newspaper because he wants to re-envision the enterprise and The Post is an iconic world brand,” said Mutter about Bezos. “He knows something about building iconic world brands.”
Shortly after the announcement, Leonard Downie, The Post’s former executive editor, sat down at the Caribou Coffee store down the block from the newsroom he once led and contemplated a future where the Grahams no longer own the newspaper.
Graham had called Downie, now a vice-president at The Post Company, earlier in the day. “I was completely shocked,” Downie said. “I could hardly say anything.” Downie arrived at the paper nearly 50 years ago, and for all of the time since, the Graham family has been at the centre of the newspaper — and more broadly, he said, at the centre of journalism in Washington.
“The important thing about the Grahams for me,” he said, referring to Ben Bradlee, his predecessor as executive editor, “is that starting with Ben and with me, and I assume my successors, is that the news decisions were always ours, but the Grahams were always behind us.”