Deep in the rock beneath the Sierra Diablo mountains in Texas, Jeff Bezos is building a $42 million clock. Standing 200ft tall, it will ring a different sequence of chimes each day for 10,000 years. A century hand will tick over every 100 years and a cuckoo will greet each millennium.
It is, Amazon’s founder says, “a symbol, an icon for long-term thinking”. After months of thought, Bezos this week announced a $250 million investment many found more eccentric: he is buying a newspaper.
His acquisition of The Washington Post sent journalists scurrying to decode the symbolism. The pioneer of e-commerce is arguably America’s most successful internet entrepreneur, worth $26 billion. What could the Kindle’s inventor see in a print-heavy business with shrinking revenues, staffing and influence?
It is a measure of the industry’s self-doubt that new entrants are welcomed with both suspicion and hope. What is Bezos’s agenda, reporters asked as they checked his political donations and wondered whether he would use the Post to lobby for lower internet sales taxes.
Others greeted him as a digital messiah. Bob Woodward and Carl Bernstein, grizzled stars of the Post’s Watergate investigation, talked of a reporting renaissance. “Suppose someone is coming in saying, let’s double, let’s triple, let’s hyperinvest,” Woodward mused excitedly.
Both the fears and hopes are probably exaggerated. Bezos echoed Eugene Meyer, who bought the Post in 1933, saying the paper’s duty was to readers and not to its owner. Bezos was as adamant that he had no magic answers to the industry’s digital questions.
Meyer is remembered as a great dynasty’s benevolent founder. His daughter, Katharine Graham, defended the Post through Watergate; his grandson, Don Graham, chairs The Washington Post Company; and Bezos says he will keep Katharine Weymouth, the fourth-generation publisher.
Yet Meyer, a Wall Street multimillionaire when he bought the bankrupt Post during the Great Depression, had his own agenda. His wife wrote that it would provide “a great opportunity for E. to be a dominant influence in this formative period of the new America”.
Newspapers now tarnish more reputations than they buff: ask Sam Zell or Brian Tierney about the Chicago Tribune or The Philadelphia Inquirer and their path from buyout to bankruptcy. By asking others to take on the burden, the Grahams are following legendary newspaper families such as the Chandlers, the Pulitzers and the Knights.
Few family owners remain: William Randolph Hearst’s heirs are sheltered by private ownership and sensible diversification into businesses such as ESPN; while the Sulzbergers, shielded by super-voting shares at The New York Times, sold more family silver this weekend. The $70 million they got for the Boston Globe was $40 million less than the pension liabilities they were stuck with.
Those who got out early – the Thomsons, who sold The Times to Rupert Murdoch; or the Bancrofts, who got $5.7 billion from him for Dow Jones – now seem smarter stewards of their family’s wealth. Yet Murdoch is still pursuing newspapers, and a new generation of proprietors is joining him.
Some have local interests, like John Henry, the Red Sox owner who bought The Boston Globe. Some have political agendas – such as the Kochs, the conservative billionaire brothers eyeing the Los Angeles Times. Others may want the fun and fame papers still bring. (Bezos, no fan of speaking to the press, is not known for his ego but few other $250 million deals get you the Post’s front page and five pages inside.)
Warren Buffett, who invested in The Washington Post Company in 1973, when its market value was $80 million, has been the most eager recent buyer. Berkshire Hathaway’s cash earnings from newspapers would almost certainly decline, he cheerfully told investors, but the deals would pay off. His bottom-feeding acquisitions have been priced so favourably that he almost cannot lose. (Note, though, that he did not beat Bezos’s offer for the Post, priced at a wild 17 times earnings.)
A few contrarians have dared to bring new ideas for making news pay. Aaron Kushner at The Orange County Register is hiring 350 extra staff, fattening up print editions by 70 per cent and recasting subscription as membership, with perks such as tickets to Anaheim Angels baseball games.
Finding a new business model will not be easy even for Bezos, but digital revenues from Kindles and other devices are already growing; and, with his patience, resources and willingness to experiment, it does not look impossible.
What should give Bezos pause is the fact that this week’s nostalgia is not for the Post’s lost margins, but for decades-old editorial glories. After years of complacency and retrenchment, rediscovering the fearless reporting ambition that once made the Post a must-read and the infectious morale of a winning editorial team will be the newcomer’s bigger challenge. “It all starts with hope,” Kushner says.
In 10 millennia, the Grahams and the Bezoses may both be forgotten. But if the Post’s new owner wants in 80 years to inspire the sentiments Meyer and his heirs prompted this week, this is where he should focus his attention, and fast. Even on a 10,000-year clock, time runs out.
Copyright the Financial Times 2013.