The mash-up between The Post, a 135-year-old legacy newspaper, and an Internet pioneer was cast Monday as a bet on the future. But it also represented a throwback to the era when rich industrialists controlled major metro dailies.
“In the olden days, before newspapers became big corporate interests, they were owned by wealthy individuals because to some degree they made money, but also because they gave them a sense of stature and power in their communities,” said media consultant Alan Mutter. “It’s not so much that we’re going back to some format. It’s that what we had in the post-World War II era was the anomaly. If you go back to colonial days, it was always this way.”
In buying The Post, Bezos will be acquiring a newspaper that has been owned by the publicly traded Washington Post Co. — soon to be renamed — and taking it private. With Bezos as its sole owner, the newspaper could be spared the turbulence of Wall Street.
Donald E. Graham, chairman and chief executive of The Post Co., told employees at a town hall meeting Monday afternoon that the Amazon founder offers a path that the current ownership cannot provide.
“As the newspaper business continued to bring up questions to which we have no answers, Katharine and I began to ask ourselves if our small public company was still the best home for the newspaper,” Graham said, referring to Publisher Katharine Weymouth, his niece. “Our revenues had declined seven years in a row. . . . We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed.”
That is the urgent challenge for the entire industry, which has undergone a severe contraction in the past two decades as publicly traded newspapers have sought to prop up flagging profits. The retrenchment led to the consolidation of major chains and attracted the investment of private equity firms, many of which cut costs further.
As revenue has continued to fall, influential business leaders have jumped at the chance to scoop up metro dailies at a fraction of the price they were once worth. In 2011, hotel developer Doug Manchester bought the San Diego Union Tribune for $110 million. Last year, Philadelphia’s two largest newspapers were sold to a group of regional power brokers and business leaders for $55 million. Both transactions triggered consternation about how the new owners would handle coverage of their business interests — a particular source of controversy in San Diego, where Manchester has dramatically remade the paper.