Romenesko: Bezos buys Washington Post for $250 million

Push the Post too far politically in any direction and you take it into Washington Times-land: unheeded and uninfluential. But keep it in your back pocket and subtly use it to influence debate... that is one powerful weapon. That alone is worth the price tag.

 

Chris Matthews is terrified that Bezos will have the Post endorse Rand Paul for President. (Not that it would make a difference.)

Closes segment by saying, "I'm worried about the Koch brothers. They're coming for the Chicago Tribune and the LA Times. They're moving, and if they get a deal, God help us."

 

No.

 

The Koch Brothers running papers wouldn't be good in part because of what how they might influence local, area politics. You don't want school board elections being decided on who would advocate teaching an extra week of Reaganomics.

But Rand Paul isn't going to be anywhere near president without a change in his foreign policy views. Too many GOP folks make too much money off of foreign meddling/nation-building-on-the-cheap for anything else to be the case.

 

Look, the vast majority of readers (as opposed to advertisers) of major metropolitan dailies are Democrats, since most Democrats live in major metropolitan areas. If they perceive their daily of habit is becoming right-wing oriented in editorial or worse, news coverage, they'll stop reading. If rich people want to lose money advancing their political views, fine. But that's all that will happen. The Washington Times (sorry, Moddy) has less than no influence on elections in its coverage area. Neither does, nor did, my alma mater the Boston Herald.

 

Did Bezos overpay for the Post?

In hindsight, the Bancroft family look like geniuses for selling when they did. At what point do the various members of the Ochs-Sulzberger family decide they want to get something for the New York Times?

 

Maybe.

But there was a story in the Times the other day about how newspapers are essentially becoming trophy purchases for rich people. They're the new yacht. Hell, Bezos bought parts of the Saturn V rocket, right? What the hell is he going to do with that?

A lot of these newspaper brands, and the Washington Post is a major one, are very stale. Because, quite frankly, the products are very stale. Particularly the commentary/op-ed part of the product. Everyone is so focused on what Bezos is going to do with the Post as a business model. Like this is all about delivery and interaction.

Newspapers need new voices. Young educated people read the Huffington Post. And they read Slate. And they read Salon. And they read niche blogs. And Wired. And - yes, Versatile - they read the Atlantic's Web site, which has shed its stodgy roots. They don't read the Washington Post. It's barely a morning stop for them. It's not for me.

This is what I think Bezos does with it. Voices. Content.

 

And, Bezos is the sole owner.

With the Bancroft and Ochs-Sulzberger families you have up to 30 family members relying on the wealth generated by the paper. Most have no role in running the paper, they just have a share of ownership.

When the paper is no longer throwing off money, some will press for a sale.

Bezos doesn't have to worry about that. Neither will John Henry. Or the Koch brothers.

 

Ragu is right. The value of the brand name is worth more than the paper's financial statements suggest. Information presented under the Washington Post brand has a louder voice to grab an audience's attention. Whether that can make the Post entity profitable, I haven't a clue. But here's a really successful businessman who thinks it can. I wouldn't dismiss his belief out of hand.
BTW, all media commentary I have read or seen on TV on this sale seems either spectacularly wrongheaded or extremely mushy. None seem able to differentiate between the future of newspapers, the physical print product, and newspapers, the generic name for large news-gathering organizations.

 

The biggest argument that Bezos overpaid is that for any newspaper, what it's worth today is greater than what it will be worth in 1 year.

If you were thinking about buying a pair of Air Jordans, sure, you could get OTHER shoes at a cheaper price. But the Air Jordans were not losing their value. You could not wait a year or two and pick them up at a cheap price. Newspapers are losing their value. Perhaps they're finally near the bottom. But it's reasonable to speculate that in August 2014 Bezos could have bought the Post for less than $200 million.

The geniuses at Tribune --- the ones who "earned" those millions of dollars in bonuses before and throughout the bankruptcy --- could have sold the L.A. Times for $2 billion a few years ago. "Not enough," they said. Now all of Tribune's newspapers combined won't fetch $600 million.

The L.A. Times was/is a brand, too. But that doesn't mean it won't continue to lose value.

 

Even if Bezos was only getting 700 of the country's best journalists, which is really the most valuable asset here, I'm not sure this would be a bad gamble. Let's go ahead and assume news gathering will exist in some form in the future. Wouldn't you want a website doing it that employed, say, Gene Weingarden? Eli Salow? Anne Hull? Ezra Klein? David Finlel? Dana Priest? Hell, Bob Woodward?