Much has happened on the business side of journalism this summer. The event media reporters least expected was for Jeffrey P. Bezos, the founder of Amazon, to buy The Washington Post and affiliated publications. The $250 million sale announced August 5 was expected to close within 60 days. Everything about the sale was a surprise: that the Graham family would part with The Post, a price that would have been laughable a few years ago and, most particularly, the buyer.
But before a news cycle passed, the idea that for the first time someone with a digital background would be in control of a major newspaper grew intriguing.
Don Graham, chairman and chief executive of The Washington Post Co., said he believed Bezos offers the best chance for The Post to thrive after eight decades of Graham family ownership. Changes were inevitable even without a sale. Bezos’s estimated fortune of $25 billion means he doesn’t need to turn a quick profit and can absorb losses. He is an innovator and a long-range thinker. He is keeping on Marty Baron, executive editor; Fred Hiatt, editor of the editorial page, and Publisher Katharine Weymouth, Graham’s niece.
“When I learned of the news, I was as surprised as everyone else,” said Marcus Brauchli, an OPC member and Baron’s predecessor told New York magazine. “But on immediate reflection, I thought that in the universe of potential buyers, among people who have long-term vision, who are civic-minded and public-spirited, Jeff Bezos was an eminently suited candidate.”
“What Don Graham did in deciding to seek out a new owner for The Washington Post was a truly brave and unselfish act,” said Brauchli, who after he stepped down as editor remained at the company as a vice president.
In a sale that was expected, even if the price seemed disappointing, The New York Times Co. sold its New England Media Group, which includes The Boston Globe, for $70 million, a fraction of the $1.1 billion the company paid for The Globe alone in 1993. The buyer is John W. Henry, principal owner of the Boston Red Sox.
Elsewhere, the industry news was about splits of even greater consequence than the summer buzz about the Murdoch divorce.
The months-long process to divide Rupert Murdoch‘s News Corp. into two entities was completed July 1 when 21st Century Fox, the more profitable entertainment arm that includes Fox Broadcasting and a Hollywood film studio, began trading separately from News Corp., which is now the publishing arm that includes The Wall Street Journal, New York Post, HarperCollins and in the United Kingdom, The Times, The Sunday Times and The Sun.
Investors had long complained that the 120 newspapers that had been part of the original News Corp. lowered profits. Those complaints grew after last summer when a phone hacking scandal at the company’s British newspaper division prompted the abrupt closure of News of the World, one of the most profitable papers.
Murdoch is chairman and chief executive of 21st Century Fox, as well as executive chairman of News Corp. Robert Thomson, a former editor of The Times, managing editor of The Wall Street Journal and editor-in-chief of Dow Jones, is chief executive of the new News Corp. The publishing unit lost $2.1 billion in the last financial year but starts its new life with $2.6 billion in cash and no debt.
Meanwhile, a week after doubling its television portfolio by agreeing to buy 19 local stations for $2.7 billion on July 1, Tribune Co. announced it would spin off its newspapers, which include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, The Orlando Sentinel and The Hartford Courant, while keeping the faster-growing TV stations, websites that are separate from the newspapers and its real estate holdings, including the Tribune Tower in Chicago. Months earlier the company said it was considering selling the papers. A split would not preclude a sale but waiting for a spinoff would make the sale tax-free to current shareholders.
A spokeswoman for Charles and David Koch said on August 22 that the brothers concluded it was not economically viable to buy the Tribune papers. When the combatively conservative billionaire industrialists expressed interest last spring, Tribune reporters, liberals and nonpartisan watchdog groups expressed concern. The spokeswoman confirmed a report on The Daily Caller, a conservative website, that a deal without websites that include CareerBuilder.com removes an important revenue stream.
The next day, Mark Walter, the controlling owner of the Los Angeles Dodgers, said he could be interested in buying the Los Angeles Times and Chicago Tribune for the right price. Walter lives in Chicago and is a founder and chief executive of Guggenheim Partners, a privately held financial services firm with more than $180 billion in assets. He may have close competition. While in town for a series between the Red Sox and the Dodgers, Henry toured the Los Angeles Times offices on August 26. Newspapers and baseball have played together before; Tribune owned the Chicago Cubs from 1981 to 2009.
The uncertainty for Time Warner’s publishing division continues after CEO Jeff Bewkes said in August the company would delay a Time Inc. spinoff until early 2014. Bewkes announced in March that he would spin off Time Inc. to focus on the more profitable TV and film divisions.
And in both a split and a sale, Newsweek was separated from The Daily Beast and sold by Barry Diller’s IAC/InterActiveCorp on August 3 to International Business Times, a digital news company, for an undisclosed price. IBT said it plans to build Newsweek‘s global online franchise. Newsweek stopped printing last December. In 2010, IAC paid The Washington Post Co. $1 plus $40 million in pension obligations to buy Newsweek.