Amazon founder and CEO Jeff Bezos has signed a deal to buy The Washington Post and sibling newspapers for $250 million, the Washington Post Company said Monday afternoon. Mr. Bezos, not Amazon, will own the newspaper.
The surprise deal includes the 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.
But siblings Slate, TheRoot.com, Foreign Policy and the Kaplan educational businesses are not part of the transaction and will remain part of the Washington Post Co. -- which will change its name. The social agency SocialCode, also part of the Washington Post Co., is also not part of the deal.
The deal is expected to close by the end of the year.
"I firmly believe that today's announcement represents a remarkable opportunity for us, unique among media companies," said Katharine Weymouth, publisher and CEO of the Post, in a memo to staff on Monday. "In Jeff we have found an owner who believes in The Post as a business but also cares deeply about the role it serves in our society."
Ms. Weymouth will stay with the company in her capacity and has asked other senior leaders to stay on as well. Mr. Bezos will remain in Seattle, where he currently lives.
The deal ends generations of control by members of the Graham family, including Katharine Graham, who was publisher when the Washington Post broke open the Watergate scandal and who died in 2001; her son Donald Graham, who succeeded her as publisher and became CEO of the broader company in 1999; and Ms. Weymouth, Katharine Graham's granddaughter.
The Washington Post Co. was founded in 1877. Financier Eugene Meyer bought the then-bankrupt paper in 1933, turning it over to son-in-law Philip L. Graham, husband of Katharine, in 1946.
Donald Graham said in a memo to staff that he had and Ms. Weymouth had begun to question whether the Post Co. was the best owner of the paper after seven straight years of declining revenue.
A better owner?
"We had innovated and to my critical eye our innovations had been quite successful in audience and in quality, but they hadn't made up for the revenue decline," he wrote. "Our answer had to be cost cuts and we knew there was a limit to that. We were certain the paper would survive under our ownership, but we wanted it to do more than that. We wanted it to succeed."
The sale also comes days after The New York Times Co. reached a deal to sell the Boston Globe to John Henry, the owner of the Boston Red Sox. The Tribune Company, meanwhile, said last month that it plans to spin its newspapers off into a separate company.
The Washington Post's newspaper division has seen operating revenue fall 44% over the past six years; the company's second-quarter revenue was essentially flat at $138 million over the same period in 2012. Like a lot of urban dailies, the Post has been unable to make digital revenue grow quickly enough to offset declines in print, despite years of investment in new digital channels like mobile apps, as well as technology to optimize and target digital ads. Digital revenue at the Washington Post newspaper division (including Slate) increased 15% to $29.5 million during the second quarter of 2013 as print ad revenue declined 4% to $54.5 million.
The company resisted a paywall around its digital content longer than most papers, arguing as recently as last summer that the concept wouldn't work for the Washington Post. It eventually reconsidered and and introducing a metered model in June that charges some readers $9.99 a month to read more than 20 articles in that time. Digital access remains unfettered for home delivery subscribers as well as teachers, students, government employees, members of the military and some others if they sign on from school or work.
Mr. Bezos tried to offer an optimistic tone to the paper's staff. "The values of The Post do not need changing," he said in a memo. "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."
Mr. Bezos said there will be changes at the Post, but did not elaborate.
In its note to staff, the Post Co. indicated no jobs will be eliminated in connection with the transaction. The paper's relationship with its subscribers and advertisers will also remain the same, it said.
Read the full memo from Mr. Bezos:
To the employees of The Washington Post:
You'll have heard the news, and many of you will greet it with a degree of apprehension. When a single family owns a company for many decades, and when that family acts for all those decades in good faith, in a principled manner, in good times and in rough times, as stewards of important values – when that family has done such a good job – it is only natural to worry about change.
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.
I won't be leading The Washington Post day-to-day. I am happily living in "the other Washington" where I have a day job that I love. Besides that, The Post already has an excellent leadership team that knows much more about the news business than I do, and I'm extremely grateful to them for agreeing to stay on.
There will of course be change at The Post over the coming years. That's essential and would have happened with or without new ownership. The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs. There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment. Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there. I'm excited and optimistic about the opportunity for invention.
Journalism plays a critical role in a free society, and The Washington Post -- as the hometown paper of the capital city of the United States -- is especially important. I would highlight two kinds of courage the Grahams have shown as owners that I hope to channel. The first is the courage to say wait, be sure, slow down, get another source. Real people and their reputations, livelihoods and families are at stake. The second is the courage to say follow the story, no matter the cost. While I hope no one ever threatens to put one of my body parts through a wringer, if they do, thanks to Mrs. Graham's example, I'll be ready.
I want to say one last thing that's really not about the paper or this change in ownership. I have had the great pleasure of getting to know Don very well over the last ten plus years. I do not know a finer man.