Tuesday, August 06, 2013

WAPO reconfigured

Yesterday the Washington Post was sold from the Graham family to Jeff Bezos (of Amazon) for $250 million.   In an open letter to the Post Community Bezos said the following - "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."

Donald Graham described the deal and explained that the Post has been bleeding cash (duh).  He looks a bit downtrodden but then with the last seven years of numbers it might be easy to understand.   Bezos will own this personally not as a part of Amazon.   But the synergies that could be produced are huge.  Post content could be integrated into Amazon content in many ways. The Post has always been a couple of steps off on the electronic side of the business especially from where the NYT and WSJ are in development of content and in making the format friendly to the electronic edition.   For the summer the WP has offered a free version of the paper and while it looks a bit better, when the trial ends I would not spend money to buy the paper.

The Post is also a paper in the middle.   It traditionally was a local paper, when I first lived in DC it had a raft of coverage of all the social events - political, diplomatic and community along with political news.   After Watergate it aspired to be a national paper of the stature of the NYT.   From my perspective it never made the cut.    Over the same period the WSJ moved from a paper focused on one audience to a national paper.   But the WAPO was stuck.   Of course, it had occasional stories that put it in the limelight but it never seemed to stick there.

During the Graham holding of the company, it diversified a bit by purchasing a couple of other newspapers and some related businesses and Kaplan.  As the details seems to have come out the rest of the Post empire which includes Kaplan and some other stuff, is not a part of the deal. That looks like a smart move.   This looks like a pure media play without all the baggage of the rest of the Post's things.  So this is Bezos using about 1% of his fortune of $25 billion to buy an asset that looks quite distressed.   But with some work and effort it could become a jewel.

My impression of the Post since I lived in Washington has been that it is a bit stodgy(indeed not just a bit), very connected to a part of the Washington establishment and not quite in touch with the rest of the country - but with some reporting abilities around the world that are pretty good.   In essence, it is a classic possible turn around story.    What interests me is whether the editorial policy of the Post will change.   Bezos has some libertarian leanings and those could benefit a paper which has been lapdog to the DC establishment for too long.

Bezos made a good point, he lives in the other Washington and claimed he does not want to become a part of the D.C. establishment.   Let's hope that happens.   The Post could benefit from some DC detachment.

One of my colleagues from work, when Amazon began, scoffed at the press that Amazon was getting.  He was an old time newspaper reporter who had had posts in London, Boston and New York.   He argued that the economic model for Amazon was flawed - but he did not understand the inherent ultimate economies of scale as things become digital (a key point of Chris Anderson's superb book Free).   If Bezos can combine an in depth ability to report the country's political news without becoming caught up in it, and if he can transition the Post into something more than it has been, then the NYT and the WSJ will have serious competition as the nation's newspaper.   We'd all benefit from the competition.

No comments: