Vanity Fair: America’s Newspapers Are Getting Bought Up by Billionaires

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Patrick Fallon / Bloomberg / Getty Images

Jeff Bezos, CEO of Amazon at a news conference in Santa Monica, Sept. 6, 2012.

Jeff Bezos, founder and CEO of e-commerce behemoth Amazon, has decided to use his personal fortune to purchase the Washington Post newspaper for $250 million. The news falls hard upon the announcement that another iconic American paper — the Boston Globe — was sold to John W. Henry, the billionaire owner of baseball’s Boston Red Sox. And world-famous investor Warren Buffett has spent the past couple of years buying up newspapers such as the Winston-Salem Journal and the Richmond Times-Dispatch.

None of these men are fools. In fact, they’re three of the most successful businessmen in America. So it comes as a surprise that they’d spend their hard-earned millions on a business model that’s in such disarray. According to the Pew Research Center, for every $16 newspapers are losing in print revenue, they gain just $1 in digital revenue.

In other words, it is an industry in rapid decline. So why are some of America’s sharpest businessmen falling over themselves to get a piece? Of the three, Buffett has the clearest case. In his most recent letter to Berkshire Hathaway shareholders, Buffett explained his interest in the newspaper business, arguing that though the industry as a whole is in serious trouble, there’s still room for newspapers with monopoly businesses in small towns, as long as they stick to delivering local news that readers can’t find anywhere else.

(MORE: Four Reasons Why Jeff Bezos and the Washington Post Will Be a Good Match)

The Boston Globe and the Washington Post certainly don’t fit this description, however. They’re both big-city broadsheets with large cost structures and, until recently at least, aspirations for covering global events and, for the Post in particular, setting the national political agenda. As such, both are beset by intense competition. The Post, for instance, competes with countless bloggers, national newspapers like the New York Times, online political organs like Politico, and does it all while losing millions of dollars per year — $54 million in 2012, in fact. The Boston Globe’s financials aren’t broken out in public, but according to industry reports, the paper’s revenue has been falling at a pace of about 7% a year and its print circulation even faster, at about 9% a year.

So why is a guy like Bezos — who’s made his billions by eviscerating business models that hadn’t the foresight to adapt to the Internet — buying such a quintessentially pre-Internet company? One would assume that a man of his track record would be looking to shake things up and find profits in this long-declining industry. But his letter to Washington Post employees tells a different story. Writes Bezos:

So, let me start with something critical. The values of the Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners. We will continue to follow the truth wherever it leads, and we’ll work hard not to make mistakes. When we do, we will own up to them quickly and completely.

I won’t be leading the Washington Post day to day. 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.

(MORE: A New Age for the Washington Post)

This doesn’t exactly sound like words of a man who is looking to radically change what the Post is doing. He goes on to write, “Journalism plays a critical role in a free society, and the Washington Post — as the hometown paper of the capital city of the United States — is especially important.”

These are the words not of a pitiless capitalist, it would seem, but of a philanthropist who’s committing his money to protect a public good. Of course even philanthropists don’t give their money away entirely without regard to their own self-interest. Ownership of a major American newspaper will give Bezos even more access to America’s political and intellectual class, and will give him forum in which to push his own political views (Bezos is a supporter of gay marriage and other libertarian causes).

So whether you’re a Warren Buffett who’s picking up newspapers for profit, or a Jeff Bezos whose motives appear to be more complicated, the fact remains that newspapers still play a significant if waning role in American life. And even if fewer Americans are willing to drop a dollar on an issue each morning, that might not matter for as long as the Jeff Bezoses and John Henrys of the world are willing to spend millions.

MORE: Amazon Founder Jeff Bezos to Buy the Washington Post for $250 Million

9 comments
leach
leach

"Times are a changing."  Print media is in the midst of an evolution into a mixture of different media.  What it will become is yet to be known.  E-books, internet news are simply the now.  Try and buy a CD player and you will find that music and the ways to enjoy it are vastly different than five years  ago.  Do new cars have CD players or only USB ports?  

Also, do not forget that the "Washington Post"  is also TV stations and a lot of other things.  We have not seen the Bezos plan, but it will be interesting.  One of the few people willing to forgo immediate profits to establish a long term position.

Glenn

JohnNicoletti
JohnNicoletti

What is happening in the world, especially America, is that the 'media' is nothing more than moneyed people purporting their views....which, in turn, bastardizes what is 'real'....for some fantasy that does not exist...in 20 years.....no one will be working....no one will own anything....nothing you hear will be Truth.....

NewYorkTheater
NewYorkTheater

This column is remarkably free of content, based almost entirely on the letter the new owner wrote to his new employees and on unsupported speculation: He's a philanthropist, and he wants "access to America's political and intellectual class" -- a phrase that perhaps sounds like it means something, but can't withstand two seconds worth of scrutiny. Left unexplored here (but not elsewhere) are the ways that owning the Post would be beneficial to Amazon. 


valentine.godoflove
valentine.godoflove

AND WHY NOT......THE MONEY HE SPENT IS A NICKEL COMPRED TO HIS FINANCIAL EMPIRE......BUT THE PAYOFF,,,,,,HE CAN AFFORD TO RUN THIS AT A LOSS AND NOT EVEN FEEL IT.....HE CAN DICTATE HIS THOUGHTS IN TO THE MORON MASSES WHO DO NOT KNOW THEY ARE BEING MANIPULATED ANYWAY.

VALENTINE, COMEDIAN, LOL

MichaelSweden
MichaelSweden

Was it not Washington Post policy that climate warming doesn't exist? Ludicrous. Owners matter, but they matter less now than before. New York times want me to pay 99 cent for reading their newspaper online. Will never do so. The whole web is full of information for free. By being ever so mainstream, editing out all conflict allways staying within the framework of the elite, they make themselves go bust because they are so polically correct. If I want for example read a review by one of the bestsellers of Noam Chomsky, I can't find it in NYT. Or Russ Bakers book about the Bush family "Family of secrets". Those books are not in the big PC-lexicon so they are not reviewed. Doesn't matter if they are serious, well research books.

I am glad to see newspapers go bust, yet another propaganda tool of the elite goes belly up. Great!

KentR
KentR

it has ever been so   when newsprint was the major source of news   pre radio tv  and way before the net  the power of the press  was extended to the power of  opinion of the editor or board of editors in the newspaper   and how far the editorial polocy goes into the  news  printed in the paper..  an Honest source prints the whole story good and bad facts and lets reader know  they also  explain when a story is Opinion.. based on some facts they hold stronger as evidence of a position  holding back facts that fail to prove the point they intend on pointing out to the reader..   its the propaganda part of a paper and the power of press. or any other media  now days the talking heads of tv and radio  or web.  this is also the power that the purchaser  wants to have.  but  since movable type  and the day of a weekly  gossup sheet  to  the most modern online blog  its the same story.

BobJan
BobJan

how to get the people to believe you-purchase a newspaper and fill their heads with your propaganda.

elcidharth
elcidharth

Personally, I feel sad that my most favorite newspaper, Washington Post, sold themselves out. I agree with the picture of the print media, being at the end of their so called business model. However, I must admit that their own internet versions, do not give the readers, one hundred percent return on their (browsing) time. Little towns, thousands of them, have always depended upon major media, for their editorials, special features, such as, book reviews, foreign policy, international relations, world's political hot-spots, such as Syria. If Bezos, hard working as he claims to be, manipulates either news, reviews or the true spirit of journalism, as I consider, most valuable, I might never visit his shop.

Here is how politicians threaten the media. Fresh and sizzling item, related to my concept of Free Press.

August 5th, 2013 05:01 PM ET

14 hours ago

CNN, NBC move forward on Hillary Clinton projects

Washington (CNN) - Republican National Committee Chairman Reince Priebus threatened Monday to try and prevent CNN and NBC from hosting 2016 GOP presidential primary debates unless both networks agreed to cancel forthcoming television specials about former Secretary of State Hillary Clinton.

CNN and NBC, in separate statements, said they would move forward with the projects.

CNN’s film unit has ordered a documentary about Clinton, who stepped down as secretary of state earlier this year after representing New York in the U.S. Senate and as first lady in the White House. The documentary is scheduled to air in 2014.

The statement from CNN said:

“CNN Films, a division of CNN Worldwide, commissioned a documentary about Hillary Clinton earlier this year. It is expected to premiere in 2014 with a theatrical run prior to airing on CNN. This documentary will be a non-fiction look at the life of a former First Lady and Secretary of State. Instead of making premature decisions about a project that is in the very early stages of development and months from completion, we would encourage the members of the Republican National Committee to reserve judgment until they know more. Should they decide not to participate in debates on CNN, we would find it curious, as limiting their debate participation seems to be the ultimate disservice to voters.”

NBC has announced plans to run a miniseries with Diane Lane playing the role of the former first lady. The statement from NBC News said:

“NBC News is completely independent of NBC Entertainment and has no involvement in this project.”

Priebus made the demands in separate letters to Jeff Zucker, president of CNN Worldwide, and Robert Greenblatt, chairman of NBC Entertainment. In the letters, which were released to the public at around the same time they were sent to each network, the RNC chairman claimed these individual programs were an effort to “promote” Clinton in anticipation of a possible run for president. While supporters are taking steps to try and build an infrastructure should Clinton decide to seek the Democratic presidential nomination, she has not indicated whether she will run again.

“Their actions to promote Secretary Clinton are disturbing and disappointing,” Priebus wrote. “I hope Americans will question the credibility of these networks and that NBC and CNN will reconsider their partisan actions and cancel these political ads masked as unbiased entertainment. If they have not agreed to pull this programming prior to the start of the RNC’s Summer Meeting on August 14, I will seek a binding vote stating that the RNC will neither partner with these networks in 2016 primary debates nor sanction primary debates they sponsor.”

In the 2012 GOP presidential primary election, CNN hosted seven of the 20 presidential debates, which were broadly viewed as helping lesser known candidates compete with better know, well-funded rivals. President Barack Obama did not face a primary challenge last year.

Need I say more?

...and I am Sid Harth