Amazon CEO Jeff Bezos at a New York charity benefit in May 2012
Billionaire tech titan Jeff Bezos, the founder and CEO of Amazon, has struck a deal to buy the Washington Post, one of the most legendary publications in American journalism, the Post reported Monday. Bezos has agreed to pay $250 million in cash for the paper, which earned glory in the 1970s for breaking the Watergate scandal, but has struggled in recent years to adapt to the Internet revolution.
Amazon has no role in the purchase, the Post said. Instead, Bezos, who is worth an estimated $25 billion, will become the paper’s sole owner. The tech billionaire’s Post buyout stunned the media world and immediately prompted comparisons to other famous moguls who have purchased newspapers, dating back to William Randolph Hearst.
News of the Bezos deal to buy the Post comes amid a rapidly shifting media landscape. Over the weekend, the New York Times sold the Boston Globe to Red Sox owner John Henry, and IAC, Barry Diller’s Internet conglomerate, sold the Newsweek brand to IBT Media, the publisher of the International Business Times.
Boutique investment bank Allen & Co. assisted in the Post’s sale to Bezos, and the deal was clinched at Allen & Co.’s annual Sun Valley retreat just weeks ago, according to Reuters. “I named a price and Jeff agreed to pay it,” Donald Graham, the Post Co.’s chief executive, told the wire service.
“We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed,” Graham wrote in a letter to employees announcing the sale of his family’s newspaper business. “Our revenues had declined seven years in a row. We had innovated, and to my critical eye our innovations had been quite successful in audience and in quality, but they hadn’t made up for the revenue decline.”
Initial reaction from Post staffers was cautiously optimistic. Ezra Klein, the paper’s star economic policy blogger, wrote that he was “shocked” but “hopeful.” Rajiv Chandrasekaran, senior correspondent and associate editor at the paper, tweeted: “Thank you, Don Graham, for not selling us to a blood-sucking hedge fund. Bezos knows how to invest in transformation.”
“Every member of my family started out with the same emotion—shock—in even thinking about” selling the Post, Graham told his paper in an interview Monday. “But when the idea of a transaction with Jeff Bezos came up, it altered my feelings.” Graham added: “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.”
Writing in the Columbia Journalism Review, Ryan Chittum described the Bezos Post buyout as a “truly landmark event in newspaper history.” Chittum wrote: “We’ve now officially entered the Billionaire Savior phase of the newspaper collapse—for good or ill.”
Bezos is widely considered to be a tech visionary par excellence. The 49-year-old New Mexico native got his start selling books on the Internet in the 1990s. Two decades later, he presides over an e-commerce empire that has redefined the consumer experience for hundreds of millions of people worldwide.
“I understand the critical role the Post plays in Washington, DC and our nation, and the Post’s values will not change,” Bezos said in a statement. “Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future.”
Post publisher Katharine Weymouth will remain as publisher and chief executive of the paper under Bezos’s ownership, and executive editor Martin Baron will remain in that position, the paper reported, which added that “no layoffs are contemplated as a result of the transaction among the paper’s 2,000 employees.” Online publication Slate and political magazine Foreign Policy are not part of the Bezos sale, the company said.
In a note to Post employees cited by the paper, Weymouth wrote, “This is a day that my family and I never expected to come. The Washington Post Company is selling the newspaper that it has owned and nurtured for eight decades. ”
Here’s the letter from Jeff Bezos to Post employees:
To the employees of The Washington Post:
You’ll have heard the news, and many of you will greet it with a degree of apprehension. When a single family owns a company for many decades, and when that family acts for all those decades in good faith, in a principled manner, in good times and in rough times, as stewards of important values – when that family has done such a good job – it is only natural to worry about change.
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.
There will of course be change at The Post over the coming years. That’s essential and would have happened with or without new ownership. The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there. I’m excited and optimistic about the opportunity for invention.
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. I would highlight two kinds of courage the Grahams have shown as owners that I hope to channel. The first is the courage to say wait, be sure, slow down, get another source. Real people and their reputations, livelihoods and families are at stake. The second is the courage to say follow the story, no matter the cost. While I hope no one ever threatens to put one of my body parts through a wringer, if they do, thanks to Mrs. Graham’s example, I’ll be ready.
I want to say one last thing that’s really not about the paper or this change in ownership. I have had the great pleasure of getting to know Don very well over the last ten plus years. I do not know a finer man.
Sincerely,
Jeff Bezos