Billionaire Amazon founder and CEO Jeff Bezos bought himself a new toy on Monday: the 136-year-old newspaper The Washington Post, which he acquired for $250 million from the Washington Post Company. The announcement blindsided the media world, where seemingly no one knew the U.S. capital's flagship paper was for sale.
Bezos' shocker makes him the second billionaire to buy a top local newspaper in the United States in the last week. On Saturday, The New York Times Company sold The Boston Globe to Red Sox owner John Henry for $70 million.
In a letter to employees of the Post, Bezos admitted that a new owner coming in after four decades of leadership from the Graham family would be jarring to some. He opened his letter directly: "You’ll have heard the news, and many of you will greet it with a degree of apprehension."
While Bezos mentioned "changes" ahead, he also noted that he won't be taking the same hands-on approach he does at Amazon. "I won’t be leading The Washington Post day-to-day," he writes. "I am happily living in 'the other Washington' where I have a day job that I love. Besides that, The Post already has an excellent leadership team that knows much more about the news business than I do, and I’m extremely grateful to them for agreeing to stay on."
At $250 million for a paper that is in its 7th straight year of declining revenues, the Post doesn't come cheap, but Bezos has more than enough money to not only cover the cost of the purchase, but also any losses that might come in a difficult news environment. FORBES estimates Bezos' net worth at $28 billion, up $3 billion since March and $5 billion since the 2012 FORBES 400.
The billionaire has expressed interest in media before. He invested in the website Business Insider earlier this year, leading a $5 million funding round. But mostly his expensive hobbies have fit into other areas, including Bezos Expeditions, which discovered the lost engines from the Apollo 11 lunar mission on the ocean floor, and aerospace firm Blue Origin, which is pouring money into private space flight technology.
Bezos continues the trend of tycoons investing in the declining world of print media. Warren Buffett's
In addition to the aforementioned purchase by Henry, Carlos Slim owns a chunk of the Times. Sam Zell took the Tribune Co. private (and then into bankruptcy less than a year later). Meanwhile, Rupert Murdoch's precious print media assets were split off into a separate company earlier this year.
Bezos' purchase was so under-the-radar, though, that the Times ran a profile of current Post publisher Katherine Weymouth this weekend with nary a mention of any possible sale. In a letter to Post employees, she wrote, "This is a day that my family and I never expected to come."
According to the Post, the Graham family hired the investment firm Allen & Co. to shop the paper in secret, and spoke to "a half-dozen potential suitors before the Post Co.'s board settled on Bezos." It's worth wondering what other billionaires may have been approached in this backroom negotiation. Buffett, given his prior relationship with the paper, would have been one logical option.
Whether he would have wanted to own the declining newspaper is a different story. But regardless of recent financial difficulties and a bleak outlook, the history and resonance of the Post brand would have made a fine trophy for many a billionaire. Bezos just got there first.
