Washington Post sale catches industry by surprise
The Washington Post, the newspaper whose reporting helped topple a president and inspired a generation of journalists, is being sold for $US250 million ($278 million) to the founder of Amazon.com, Jeff Bezos, in a surprise deal that has shocked the industry.
Donald Graham, chairman and chief executive of The Washington Post Co, and the third generation of the Graham family to lead the paper, told staff about the sale late on Monday afternoon. They had gathered together in the newspaper's auditorium at the behest of the publisher, Katharine Weymouth, his niece.
"I, along with Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post," Mr Graham said in a statement.
The announcement was greeted by "shock" as one of the crown jewels of newspapers was surrendered by one of the industry's royal families.
In Mr Bezos, the Post will have a very different owner, a technologist whose fortunes have risen even as those of the Post and most newspapers have struggled. Through Amazon, the retailing giant, he has helped revolutionise the way people around the world consume - first with books, then expanding to all kinds of goods and more recently in online storage, electronic books and online video, including a recent spate of original programming.
Mr Bezos is buying the Post in a personal capacity. The deal includes all of the publishing businesses owned by The Washington Post Co.
The Washington Post Co plans to hold on to Slate magazine, The Root.com and Foreign Policy magazine. Mr Bezos has asked Ms Weymouth to remain at the Post along with other key executives.
Ms Weymouth said Mr Bezos had made it clear he was not purely focused on profits.
The sale, at a price that would have been unthinkably low even a few years ago, represents the end of eight decades of ownership by the Graham family of The Washington Post since Eugene Meyer bought it at auction in 1933. His son-in-law Phillip Graham served as president of the paper from 1947 until his death in 1963. Graham's widow, Katharine Graham, oversaw the paper through the publication of the Pentagon Papers alongside The New York Times and its coverage of Watergate, the political scandal that led to the resignation of Richard Nixon.
The Post's daily circulation peaked in 1993 with 832,332 subscribers, but like most newspapers it has suffered greatly from circulation and advertising declines. By March, circulation had dropped to 474,767. The company became pressed enough for cash that Ms Weymouth announced in February that it was looking to sell its flagship headquarters.
As of last year, the newsroom, which once had more than 1000 staff, had fewer than 640.
The Post is not the only newspaper to move to new ownership recently. The New York Times Company announced on Saturday it had sold its New England Media Group, which includes The Boston Globe, for $US70 million, a fraction of the $US1.1 billion The Times Co paid for just the Globe in 1993.
Ken Doctor, an analyst at Outsell, said the Post sale reflected a trend of newspaper ownership returning to local investors rather than large, publicly traded enterprises.
"Newspapers are not really much creatures of the marketplace any more," Mr Doctor said. "They're not throwing off much in profits. They need shelter from the pressure of quarterly financial statements and reports."