A few months after investing some pocket change into the slideshow-focused "Business Insider", Jeff Bezos has decided to buy the Washington Post newspaper publishing business, including the WaPo paper itself for $250 MM. The headline blast:
Jeffrey P. Bezos to purchase Washington Post, Express, Gazette, other Greater Washington, DC papers -- deal valued at $250 million #breaking— Reuters Business (@ReutersBiz) August 5, 2013
It is unclear if the online version of WaPo goes with it, but most likely the answer is yes. It is also unclear just what Bezos' strategy is for the hard-version of the WaPo: maybe instead of selling 450,000 daily copies at $1.25, Bezos will sell 450,000,000,000 at -$1.25?
So long-overdue consolidation in the media space by rich, bored billionaires, or just the imminent arrival of even more slideshows, and even more epic losses to be "made up with volume"? Only time will tell.
The full press release, for now not in slideshow format, and precisely zero kittens:
The Washington Post Company (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.”
Mr. Bezos has asked Katharine Weymouth, CEO and Publisher of The Washington Post; Stephen P. Hills, President and General Manager; Martin Baron, Executive Editor; and Fred Hiatt, Editor of the Editorial Page to continue in those roles.
“With Mr. Bezos as our owner, this is the beginning of an exciting new era,” said Ms. Weymouth. “I am honored to continue as CEO and Publisher. I have asked the entire senior management team at all of the businesses being sold to continue in their roles as well.”
The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.
Slate magazine, TheRoot.com and Foreign Policy are not part of the transaction and will remain with The Washington Post Company, as will the WaPo Labs and SocialCode businesses, the Company’s interest in Classified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC. The Washington Post Company, which also owns Kaplan, Post–Newsweek Stations and Cable ONE, will be changing its name in connection with the transaction; no new name has yet been announced.
The purchase price is $250 million, subject to normal working capital adjustments, payable at closing later this year.
Allen & Co. assisted the Post Company in the sale process.
And from the WaPo itself, which explains its reasoning to sell itself:
The Washington Post Co. has agreed to sell its flagship newspaper to Amazon.com founder and chief executive Jeffrey P. Bezos, ending the Graham family’s stewardship of one of America’s leading news organizations after four generations.
Bezos, whose entrepreneurship has made him one of the world’s richest men, will pay $250 million in cash for The Post and affiliated publications to the Washington Post Co., which owns the newspaper and other businesses.
Seattle-based Amazon will have no role in the purchase; Bezos himself will buy the news organization and become its sole owner when the sale is completed, probably within 60 days. The Post Co. will change to a new, still-undecided name and continue as a publicly traded company without The Post thereafter.
The deal represents a sudden and stunning turn of events for The Post, Washington’s leading newspaper for decades and a powerful force in shaping the nation’s politics and policy. Few people were aware that a sale was in the works for the paper, whose reporters have broken such stories as the Pentagon Papers, the Watergate scandals and disclosures about the National Security Administration’s surveillance program in May.
For much of the past decade, however, the paper has been unable to escape the financial turmoil that has engulfed newspapers and other “legacy” media organizations. The rise of the Internet and the epochal change from print to digital technology have created a massive wave of competition for traditional news companies, scattering readers and advertisers across a radically altered news and information landscape and triggering mergers, bankruptcies and consolidation among the owners of print and broadcasting properties.
“Every member of my family started out with the same emotion—shock—in even thinking about” selling The Post, said Donald Graham, the Post Co.’s chief executive, in an interview Monday. “But when the idea of a transaction with Jeff Bezos came up, it altered my feelings.”
Added Graham, “The Post could have survived under the company’s ownership and been profitable for the foreseeable future. But we wanted to do more than survive. I’m not saying this guarantees success but it gives us a much greater chance of success.”
The Washington Post Co.’s newspaper division, of which The Post newspaper is the most prominent part, has suffered a 44 percent decline in operating revenue over the past six years. Although the paper is one of the most popular news sources online, print circulation has dwindled, too, falling another 7 percent daily and Sundays during the first half of this year.
Ultimately, the paper’s financial challenges prompted the company’s board to consider a sale, a step once regarded as unthinkable by insiders and the Graham family itself.
With extraordinary secrecy, Graham hired the investment firm Allen & Co. to shop the paper, company executives said. 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.
Bezos, in an interview, called The Post “an important institution” and expressed optimism about its future. “I don’t want to imply that I have a worked-out plan,” he said. “This will be uncharted terrain and it will require experimentation.”
He said, “There would be change with or without new ownership. But the key thing I hope people will take away from this is that the values of The Post do not need changing. The duty of the paper is to the readers, not the owners.”
Despite the end of the Graham family’s control of the newspaper after 80 years, Graham and Bezos said management and operations of the newspaper would continue without disruption after the sale.
Post publisher Katharine Weymouth—Graham’s niece and the fourth generation of her family involved in the newspaper—will remain as publisher and chief executive of the Bezos-owned Post; executive editor Martin Baron will continue in his job. No layoffs are contemplated as a result of the transaction among the paper’s 2,000 employees, who will be told of the sale at a company-wide meeting Monday afternoon.
Bezos said he would maintain his home in Seattle and would delegate the paper’s daily operations to its existing management. “I have a fantastic day job that I love,” he said.