Amazon.com owner Jeff Bezos has purchased The Washington Post, the company announced Monday. Post Co. chief Don Graham made the announcement to employees in the newspaper’s auditorium. Here’s audio from the meeting:
The purchase price is $250 million, the Post says in a release. According to an SEC filing, Bezos is paying cash. Publisher Katharine Weymouth and Executive Editor Marty Baron will remain in their jobs.
Slate and some other online ventures will stay with the Washington Post Co., which will change its name, the announcement says.
“The deal represents a sudden and stunning turn of events for The Post,” Post reporter Paul Farhi writes.
“Every member of my family started out with the same emotion—shock—in even thinking about” selling The Post, said Donald Graham, the Post Co.’s chief executive, in an interview Monday. “But when the idea of a transaction with Jeff Bezos came up, it altered my feelings.”
In a statement, Graham said the “newspaper business continued to bring up questions to which we have no answers” and that “Katharine and I began to ask ourselves if our small public company was still the best home for the newspaper.” He continued:
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. Our answer had to be cost cuts and we knew there was a limit to that. We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed.
“This is the second sale in three days of a highly respected but financially struggling metro paper to a very wealthy person,” Poynter’s Rick Edmonds said in an email. “To me, what this means is that the transition to the digital era is taking longer than hoped and may entail poor profits and big investments in transformation for years to come — three, five, ten.”
Like the Boston Globe’s probably soon-to-be owner John Henry, Edmonds said, Bezos “can be patient over that span and pour as much money as he wishes into making the Post a sustainable business upholding its journalistic legacy.”
The flip side is that a public company — the Washington Post Co. or the New York Times Co — cannot justify that same level of patience and investment. They need to be investing in areas of growth and opportunity. I think we see some of that dynamic in Gannett making cuts to its community newspapers while growing its local broadcast footprint with the acquisition of Belo.
“This is a day that my family and I never expected to come,” Weymouth says in a letter to employees. “In Jeff we have found an owner who believes in The Post as a business but also cares deeply about the role it serves in our society.”
“The values of The Post do not need changing,” Bezos writes in a letter to employees. He continues:
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.
Some related documents:
Washington Post press release:
WASHINGTON—August 5, 2013—The Washington Post Company (NYSE: WPO) announced today that it has signed a contract to sell its newspaper publishing businesses, including The Washington Post newspaper, to Jeffrey P. Bezos.
The purchaser is an entity that belongs to Mr. Bezos in his individual capacity and is not Amazon.com, Inc.
“Everyone at the Post Company and everyone in our family has always been proud of The Washington Post — of the newspaper we publish and of the people who write and produce it,” said Donald E. Graham, Chairman and CEO of The Washington Post Company. “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 (after a transaction that would be in the best interest of our shareholders). Jeff Bezos’ proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post.”
“I understand the critical role the Post plays in Washington, DC and our nation, and the Post’s values will not change,” said Mr. Bezos. “Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future.”
Mr. Bezos has asked Katharine Weymouth, CEO and Publisher of The Washington Post; Stephen P. Hills, President and General Manager; Martin Baron, Executive Editor; and Fred Hiatt, Editor of the Editorial Page to continue in those roles.
“With Mr. Bezos as our owner, this is the beginning of an exciting new era,” said Ms. Weymouth. “I am honored to continue as CEO and Publisher. I have asked the entire senior management team at all of the businesses being sold to continue in their roles as well.”
The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.
Slate magazine, TheRoot.com and Foreign Policy are not part of the transaction and will remain with The Washington Post Company, as will the WaPo Labs and SocialCode businesses, the Company’s interest in Classified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC. The Washington Post Company, which also owns Kaplan, Post–Newsweek Stations and Cable ONE, will be changing its name in connection with the transaction; no new name has yet been announced.
The purchase price is $250 million, subject to normal working capital adjustments, payable at closing later this year.
Allen & Co. assisted the Post Company in the sale process.
Weymouth to employees:
This is a day that my family and I never expected to come. The Washington Post Company is selling the newspaper it has owned and nurtured for eight decades.
In addition to The Washington Post, the company is selling Greater Washington Publishing, the Gazette newspapers, Express, El Tiempo Latino and Robinson Terminal.
The buyer is one of America’s great innovators and most respected business leaders, Jeff Bezos, chief executive officer and founder of Amazon.com. Jeff is making this acquisition in his personal capacity and not as part of Amazon.
In his own remarks, Don has addressed why the company has made this decision. I want to focus on the future. I firmly believe that today’s announcement represents a remarkable opportunity for us, unique among media companies. In Jeff we have found an owner who believes in The Post as a business but also cares deeply about the role it serves in our society.
Jeff is widely known, of course, as the founder and CEO of Amazon. He is a proven entrepreneur who, like the Graham family and this company, takes the long-term view in his investments. While he expects The Post to remain profitable, his focus is on the essential role that our journalism has on dialogue and the flow of information in our society.
Jeff knows as well as anyone the opportunities that come with revolutionary technology when we understand how to make the most of it. Under his ownership, we will be able to accelerate the pace and quality of innovation.
I am incredibly proud of the work that we have done together over the past 5 years, and I know that sentiment is shared by the entire senior management team.
Because of your outstanding efforts, The Washington Post newspaper division has made money (excluding restructuring and non-cash expenses) in each of the last three years and in every year except one before that. We are particularly proud that we have been able to do this while maintaining and investing in the quality and ambition of our journalism.
With Jeff as our owner, this is not an end for us but the beginning of an exciting new era. I am sharing separately remarks he has written to you, the employees of The Washington Post. I think you will see in those remarks the kind of owner you will be proud to work for and why we are excited about a future with him.
Jeff will remain in Seattle. He has asked that I remain as your Publisher and CEO. I am honored to do so. I have asked the entire senior management team to continue in their roles as well. And I hope that you, too, will join us in a future that is filled with opportunity.
While I know that an announcement of this sort inevitably causes anxiety and uncertainty, we owe it to our readers and ourselves to make this transition as smooth as possible.
Our mission does not change. Nor do the values that have been at the core of The Post’s enduring strength over many decades. Jeff shares the principles that have guided the Graham family’s proud stewardship of this great news organization.
I will be talking to as many of you as I can over coming days, weeks and months. I know that there will be many questions about what this means for the organization as a whole and for each of you individually. We will do our very best to keep you informed with regular updates as we have news to share.
While we are just beginning the transition process, we have created an initial set of FAQs designed to address many of the questions that will naturally arise. They are attached to this note.
Nothing is more important to this company than the people who work here. Be assured that we will never lose sight of that as we open a new chapter in the storied history of this great company.
Bezos’ letter to employees:
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.
Here’s how journalists are reacting to the news: