WASHINGTON, D.C. Aug. 5 (DPI) – Amazon.com founder Jeff Bezos has agreed to purchase The Washington Post and its affiliated properties for a modest $250 million, a dramatic move that raises the stakes for rival The New York Times, the last remaining family-controlled major newspaper and media firm in the nation.
Like all newspaper franchises, The Washington Post has been imploding for years, and its sale today by the Graham family, after 80 years of ownership, represents the end of an historic run. As publishers the Grahams built a respected and once-valuable journalistic brand.
But in the digital age, serious everyday journalism lost its business model. Digital advertising never replaced the revenues of print, and The Washington Post only a few months ago introduced a pay wall to its web site – at least a decade too late, by many estimates.
The $250 million that Bezos is paying for The Washington Post is almost generous given recent transactions. This week The New York Times announced that it was selling The Boston Globe to John Henry, majority owner of The Boston Red Sox, for $70 million, more than $1 billion less than the $1.1 billion the Times paid in 1994.
Indeed, the decline in the value of major newspaper properties has been breathtaking. In 2007, the Bancroft family sold its controlling interest in The Wall Street Journal to Rupert Murdoch, who two years later had to write off for balance sheet purposes nearly half of a $5.6 billion purchase price.
The Bezos deal certainly blindsided the New York Times, which only this weekend came out with a fawning profile of WashPo CEO and President Katherine Weymouth. The article, by Sheryl Gay Stolberg, made no suggestion of a potential change in ownership:
Meantime, the Bezos deal will likely lead to another wealthy business tycoon losing part of his fortune in the modern newspaper business. The fundamental problem: The industry can no longer sell news to a majority of the public, a public that’s been conditioned — and content — to receive third-rate news reporting for free.