Who's Mainstream Now? New Media Buys Old as Amazon's Jeff Bezos Acquires the Washington Post

Who's mainstream now?

The news that Amazon's Jeff Bezos personally bought the storied Washington Post for $250 million in cash has rocked the business and media world.

This follows hard on the heels of the news that the New York Times sold its stake in the Boston Globe for $70 million (minus pension obligations, which the Times agreed to keep). This was a significant discount from the $1.1. billion the Times paid for the Globe twenty years ago.

It must be noted that venerable newspapers in Chicago and Philadelphia have been sold in the recent past to billionaire real estate developers - Sam 'The Gravedancer' Zell for the Chicago Tribune - and to consortia of local worthies in the case of the Philadephia Inquirer. Papers in San Francisco, Los Angeles, New Orleans and other metro areas have faced similar hardships and humiliations. Ironically, of course, many of these travails are due to the depredations of the aforementioned Mr. Bezos and his tech confreres.

We know that the newspaper business and all of publishing for that matter is desperately trying to figure out how to remain both relevant and solvent. No easy task. The ultimate irony, however, may be that for all their wealth and power, tech titans and business moguls (like the ideologically driven billionaire Koch brothers) still find that owning a national newspaper affords the sort of gravitas that mere business success can not convey.

Whether these are vanity acquisitions or serious business ventures remain to be seen. While there are benefits to having patient investors buy traditional news sources, the acquirers - as in the case of Jeff Bezos - have a business interest in the outcome of public policy debates which their new acquisitions can influence. Amazon is notorious for underpaying its workers and faces strikes in Europe, among other locales, due to oppressive working conditions. At the same time, Bezos has ignored investors' concerns about margins to focus on building his business. It is not clear which factor will drive his management of the Post. But it is apparent that the traditional news business needs saviors and, surprisingly, that the likely saviors seem to need the prominence that owning the news provides. JL

Ryan Chittum reports in the Columbia Journalism Review:

We’ve now officially entered the Billionaire Savior phase of the newspaper collapse—for good or ill

There must be a dozen serious, fascinating implications of the jaw-dropping news that the Graham family is selling the Washington Post to Amazon founder Jeff Bezos.
Here are a few quick takes, which we’ll be fleshing out in the days, months, and years ahead in the wake of a truly landmark event in newspaper history.
First, this will be the first time a major newspaper has been owned by a tech revolutionary. I’ve criticized Bezos and Amazon heavily over the years, but there’s no doubt the man is a business genius who understands the Internet as well as anyone. Newspapers have had an extraordinarily difficult time—to the extent they’ve even tried—hiring top-notch digital talent. Bezos knows the people and has the money to change that in a major way. The question is how that will affect the quality of the paper’s journalism.
Second, expect the Post’s paywall to fall quickly after Bezos takes over. Someone with $25 billion doesn’t buy the Washington Post as much for its pathetic business prospects as he does for its outsized influence. Bezos doesn’t really need the tacked-on revenue that digital circulation will provide the Post.
Third, $250 million is a fire sale for one of the great American newspapers, however diminished. The New York Times is valued by the stock market at more than $1.5 billion. The Grahams’ decision to not go national when they had the chance was an enormous failure.
Fourth, Bezos has operated Amazon on slim-to-no profit margins since it started making money. That’s a good sign for the Post since its margins are slim to none. What the paper has needed is investment. It seems likely that Bezos will provide it. In slamming the Graham family’s caretaking of the Post last year, I noted how much it had squandered on share buybacks and dividends meant to hand short-term profits to shareholders. Bezos runs Amazon in a completely opposite manner.
A corollary: Will Bezos run the Post as a business or as a philanthropy—or some hybrid of the two?
Fifth, Bezos has enormous political interests in Washington. How much will the Post’s editorial operations become a megaphone for his libertarian views and for Amazon’s business interests?
Sixth, Bezos bought the Post but skipped the digitally native Slate. I have no idea why—perhaps it wasn’t for sale—but I’d like to know.
Finally, we have now officially entered the oft-predicted Billionaire Savior phase of the newspaper-industry’s collapse. Two of the best papers in the country have gone this route in the last few days: The Boston Globe and now the Post. In the coming months, the same will likely happen with the Los Angeles Times and the Chicago Tribune.
Will other Silicon Valley/Seattle billionaires follow Bezos into the journalism game? It has to be awfully tempting when you can pick up an institution like the Washington Post for chump change. And if they can figure out a business model or subsidize journalism in the absence of one, they can repair some of the massive collateral damage their businesses have unleashed on how we fund serious public-interest journalism.