The Graham family has controlled the iconic newspaper since the 1930s, including at its height in the mid 1970s when Bob Woodward and Carl Bernstein’s coverage of the Watergate scandal helped to topple President Richard Nixon. But that ends with the deal today: Jeff Bezos has agreed to pay $250M for The Washington Post and other newspapers owned by its parent company, but not related properties Slate magazine, TheRoot.com and Foreign Policy. Bezos also is not buying the Post–Newsweek TV Stations and Cable ONE; they will stay with the Washington Post Co., which will change its name.
“I understand the critical role the Post plays in Washington, DC and our nation, and the Post’s values will not change,” Bezos says. “Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future.” He has asked CEO and Publisher Katharine Weymouth, General Manager Stephen Hills, Executive Editor Martin Baron, and Editorial Page Editor Fred Hiatt to remain in their positions. The release emphasizes that Bezos is buying the papers “in his individual capacity,” not to be part of Amazon. “The Post could have survived under the [Washington Post] company’s ownership and been profitable for the foreseeable future,” CEO Donald Graham told his paper. “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.” In a letter to readers Weymouth said that the decision to sell was made “with a heavy heart,” but adds that Bezos “will continue the tradition that the Graham family started” to offer “tough, penetrating, insightful, and indispensable journalism.”
Last week the company reported that The Washington Post‘s daily circulation in the first half of 2013 was down 7.1% vs the period last year to 447,700. The company’s newspaper business reported a net loss of $49.3M, up from a $33.2M loss in the first half of 2012, on revenues of $265.7M, -2%. Washington Post shares are up 5.2% in post-market trading.
Here’s the release:
WASHINGTON–Aug. 5, 2013– The Washington Post Company (NYSE: WPO) announced today that it has signed a contract to sell its newspaper publishing businesses, including The Washington Post newspaper, to Jeffrey P. Bezos.
The purchaser is an entity that belongs to Mr. Bezos in his individual capacity and is not Amazon.com, Inc.
“Everyone at the Post Company and everyone in our family has always been proud of The Washington Post — of the newspaper we publish and of the people who write and produce it,” said Donald E. Graham, Chairman and CEO of The Washington Post Company. “I, along with Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post (after a transaction that would be in the best interest of our shareholders). Jeff Bezos’ proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post.”
“I understand the critical role the Post plays in Washington, DC and our nation, and the Post’s values will not change,” said Mr. Bezos. “Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future.”
Mr. Bezos has asked Katharine Weymouth, CEO and Publisher of The Washington Post; Stephen P. Hills, President and General Manager; Martin Baron, Executive Editor; and Fred Hiatt, Editor of the Editorial Page to continue in those roles.
“With Mr. Bezos as our owner, this is the beginning of an exciting new era,” said Ms. Weymouth. “I am honored to continue as CEO and Publisher. I have asked the entire senior management team at all of the businesses being sold to continue in their roles as well.”
The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.
Slate magazine, TheRoot.com and Foreign Policy are not part of the transaction and will remain with The Washington Post Company, as will the WaPo Labs and SocialCode businesses, the Company’s interest in Classified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC. The Washington Post Company, which also owns Kaplan, Post–Newsweek Stations and Cable ONE, will be changing its name in connection with the transaction; no new name has yet been announced.
The purchase price is $250 million, subject to normal working capital adjustments, payable at closing later this year.
Allen & Co. assisted the Post Company in the sale process.