People of IPR
Mon August 5, 2013
Amazon CEO To Buy 'Washington Post' And Sister Papers
Originally published on Mon August 5, 2013 5:24 pm
MELISSA BLOCK, HOST:
The man who pushed the book publishing industry into the digital age is now buying one of the country's most storied newspaper companies. Jeff Bezos, founder of Amazon.com, is acquiring The Washington Post and its small sister papers. The news broke after the markets closed today. NPR's David Folkenflik covers the newspaper industry, and he joins me now. And, David, this was, I think, the best-kept secret in Washington. Tell us some details of this transaction and how it came about.
DAVID FOLKENFLIK, BYLINE: Well, it's an astonishing development. The Washington Post Company in great secrecy had hired consultants to try to sound out suitors. They were able to secure about a half-dozen of them. Bezos, with his personal fortune, is acquiring the Washington Post and, as you say, some of the smaller sister newspapers. It will not be part of Amazon per se, but obviously between the $250 million that's he's putting up for the newspapers and also the digital acumen that he brings, I think they hope that he can - and his fortune, I might add - they hope that he can bring a brighter future for the Post company.
BLOCK: Well, the Washington Post has been controlled by the Graham family. It's a newspaper dynasty - controlled for about 80 years, I think. Why would the family sell The Washington Post?
FOLKENFLIK: Well, to give you an idea of how much of a surprise it is that the family would do this, Katharine Weymouth, the daughter of Don Graham, the chairman of the Washington Post Company, and the granddaughter of the great Kay Graham, the legendary leader of the Washington Post, you know, she is now the CEO of the Washington Post and, again, the publisher there. And she was just depicted in an enormous profile in the New York Times about how she was finally taking the reins.
FOLKENFLIK: Well, actually, what's happened is that they suffered a precipitous decline in revenues and an incredible loss of circulation. They were at one time considered the model for what's called penetration. That is the number of households in a given area to take a newspaper. They had to cut their staff significantly, but a lot of analysts think they're going to have cut even more so. They've been late in adopting what's called the paywall, to get people to pay for digital access.
This has been a paper that's really been suffering. And they also had been buffering some of those losses with income from the Stanley Kaplan education division. That financial model has taken a hit as well as it's been looked at hard by federal regulators. And so they're really been seeing much margin for maneuver, and they looked like they acted much quicker than people thought they would to divest themselves of the newspaper itself.
BLOCK: And Katharine Weymouth, who you mentioned is the publisher, she is still staying on in that role, correct?
FOLKENFLIK: She is and also Marty Baron, the newly hired executive editor brought in from the Boston Globe to lead the newspaper in this era, has been asked to stay on by Bezos as well.
BLOCK: Well, the Washington Post has tentacles in a bunch of other fields. What happens to the rest of the company?
FOLKENFLIK: So they've got a couple of online organizations. They've got Slate, Foreign Policy, a well-known publication, they have few TV stations, a stake in what's called Classified Ventures, and as I mentioned, Stanley Kaplan. Those will remain. They will be still a part of what we have thought of as The Washington Post Company, but that name will be changed.
It is a publicly traded company, but as you say, really run almost as though it were a private one by the Graham family. Interestingly, another billionaire, Warren Buffett holds nearly a quarter stake in The Washington Post Company, but he decided not to invest in this. He's put his money on smaller newspapers to acquire in smaller communities around the country.
BLOCK: And briefly, David, what do you think the future of The Washington Post looks like under Jeff Bezos?
FOLKENFLIK: Well, you know, Bezos can comes off as kind of goofy in public, but he's actually incredibly insightful. People who know him have described him to me as very civic-minded, very careful and thoughtful about both philanthropy and about questions of public good. His political outlook is not well known, whether or not he'd be interested in meddling is not known. You know, he's given money to politicians on both sides but then Amazon has a lot of issues at stake before the United States government. I think that...
BLOCK: And, David, we're going to have to leave it there. I apologize. That's NPR's David Folkenflik. Thanks so much.
You're listening to ALL THINGS CONSIDERED. Transcript provided by NPR, Copyright NPR.