The Washington Post Co. agreed Monday to sell its flagship newspaper to Amazon.com founder and chief executive Jeffrey P. Bezos, ending the Graham family’s stewardship of one of America’s leading news organizations after four generations.
Bezos, whose entrepreneurship has made him one of the world’s richest men, will pay $250 million in cash for The Post and affiliated publications to The Washington Post Co., which owns the newspaper and other businesses.
Seattle-based Amazon will have no role in the purchase; Bezos himself will buy the news organization and become its sole owner when the sale is completed, probably within 60 days. The Post Co. will get a new, still undecided name and continue as a publicly traded company without the newspaper.
The deal represents a sudden and stunning turn of events for The Post, Washington’s leading newspaper for decades and a powerful force in shaping the nation’s politics and policy. Few people were aware that a sale was in the works for the paper, an institution that has covered presidents and local communities and gained worldwide attention for its stories about the Watergate scandal and, in June, disclosures about National Security Agency surveillance programs.
Post Co. chairman and chief executive Donald E. Graham and Post publisher Katharine Weymouth, his niece, broke the news of the sale to a packed meeting of employees at the company’s headquarters in downtown Washington on Monday. The mood was hushed; several veteran employees cried as Graham and Weymouth took turns reading statements and answering questions. “Everyone who was in that room knows how much Don and Katharine love the paper and how hard this must have been for them,” said David Ignatius, a veteran Post columnist who was visibly moved after the meeting.
But for much of the past decade, The Post has been unable to escape the financial turmoil that has engulfed newspapers and other “legacy” media organizations. The rise of the Internet and the epochal change from print to digital technology have created a massive wave of competition for traditional news companies, scattering readers and advertisers across a radically altered news and information landscape and triggering mergers, bankruptcies and consolidation among the owners of print and broadcasting properties.
“Every member of my family started out with the same emotion — shock — in even thinking about” selling The Post, Graham said in an interview Monday. “But when the idea of a transaction with Jeff Bezos came up, it altered my feelings.”
He added: “The Post could have survived under the company’s ownership and been profitable for the foreseeable future. But we wanted to do more than survive. I’m not saying this guarantees success, but it gives us a much greater chance of success.”
Bezos, 49, will take the company private, meaning he will not have to report quarterly earnings to shareholders or be subjected to investors’ demands for ever-rising profits, as the publicly traded Washington Post Co. is obligated to do now. As such, he will be able to experiment with the paper without the pressure of showing an immediate return on any investment. Indeed, Bezos’s history of patient investment and long-term strategic thinking made him an attractive buyer, Weymouth said.
The Washington Post Co.’s newspaper division, of which the Post newspaper is the most prominent part, has suffered a 44 percent decline in operating revenue over the past six years. Although The Post is one of the most popular news sources online, print circulation has dwindled, falling an additional 7 percent daily and on Sundays during the first half of this year.
Ultimately, the paper’s financial challenges prompted the company’s board to consider a sale, a step once regarded as unthinkable by insiders and the Graham family.
Seeking a buyer
With extraordinary secrecy, Graham hired the investment firm Allen & Co. to shop the paper, company executives said. Graham said he thinks the firm first made contact with Bezos in March or April. But the communications broke off for two months. They did not resume until mid-July, according to Graham, when Bezos contacted him; the two men met twice during a conference.
“At the end of it he said he thought he wanted to go ahead,” Graham said, “but he — obviously, he and his team -- needed time to really look over the business and understand it more thoroughly. And then he did, and we quickly reached a deal.”
Allen’s representatives spoke with a half-dozen potential suitors before The Post Co.’s board settled on Bezos, a legendary tech innovator who has never operated a newspaper.
Bezos, in an interview, called The Post “an important institution” and expressed optimism about its future. “I don’t want to imply that I have a worked-out plan,” he said. “This will be uncharted terrain, and it will require experimentation.”