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A few years from now, we may find out some of the problems at the Washington Post can’t be cured by throwing money at them.
Circulation continues to decline, after all, and revenues with them. Digital ads don’t make anywhere near enough money to support the paper’s robust newsgathering operations on their own. As for print ads, on the morning the Post reported on its own sale to Amazon founder and CEO Jeff Bezos, the eight-page Metro section included three display ads that weren’t for the paper or its charities: one for discounted window replacements, one seeking donated cars for Make-a-Wish Mid-Atlantic, and one for a mattress sale. There were days this spring when the only ads in the local news section were placed by the paper’s real estate agents, reminding would-be redevelopers that its headquarters at 15th and L streets NW is up for grabs. (It still is; Bezos isn’t buying the building.)
What definitely wouldn’t have fixed any of what ails the paper, though, was more of the same treatment the Post has been in for over the last decade: buyouts, cutbacks, and a slow, steady decline from the glory days. “We knew we could keep the Post alive, we knew it could survive,” Washington Post Company CEO Don Graham, whose grandfather Eugene Meyer bought the paper 80 years ago, told a reporter for Post TV, in an online video of the sort that wouldn’t have existed not that long ago. “But our aspirations for the Post have always been higher than that.”
The Post’s newspaper division recorded an operating loss of $53 million in 2012, after losing $21 million in 2011. (Though accounting for voluntary pension charges, the paper lost only—only!—$11.3 million last year and made a profit of $4.1 million the year before.) In 2002, the Post had made $109 million from newspapering, and another $25 million operating Newsweek, which the paper’s parent company sold for $1 in 2010. Tallied up in a spreadsheet, figures like that have a way of crushing all aspirations, high or low. Graham and publisher Katharine Weymouth, his niece, may not have figured out a way to make the news business work financially in 2013 (nor have I, obviously, as the editor of a modestly profitable alt-weekly with annual revenues that the Post’s easily dwarf). But they did manage to find an owner who could liberate the paper from Wall Street’s short time horizons.
Bezos, whose net worth is reportedly about 100 times the $250 million he’s spending to buy the Post, Express, El Tiempo Latino, and some suburban papers, didn’t say this week exactly what he planned to do with the paper’s budget. He’s unlikely to worry much about how quickly he sees a return on his investment, though. For a guy as rich as Bezos is, dropping a quarter of a billion dollars on the Post amounts to the equivalent of buying three of Amazon’s Kindle Fire HD tablets for someone with the nation’s median household net worth of just more than $68,000. The Post’s online revenues have been increasing lately, and Bezos can afford to wait and see whether initiatives like the paper’s paywall, its heavy expansion into video journalism, and self-contained brands like Ezra Klein’s Wonkblog or Chris Cillizza’s Politico-esque The Fix really are the beginnings of a new business model for a daily newspaper. The Graham family and their investors, apparently, couldn’t.
Amazon, meanwhile, sometimes makes big profits and sometimes doesn’t. Lately, it’s been plowing its earnings into expanding its local distribution networks in cities around the country, which is the kind of thing that gives me hope that the days when I leave town and put a vacation stop on my Post delivery, only to return to see several old copies of the paper that I didn’t pay for and won’t read piled up on my porch, might end after the sale closes.
Besides the two obvious conclusions, though—that the buyer has plenty of money to throw at fixing the Post’s problems if he wants to, and that the sellers no longer did—it may be too early to say What It All Means. Not that that’s stopped anyone from trying: Beltway political consultants see the sale as a sign that Silicon Valley is ascendant in Washington (never mind that Bezos and Amazon are based in Seattle). Observers worry, maybe with some reason, that the Post’s editorial line will now support Amazon’s priorities, on everything from Internet sales taxes (it’s for them, after years of being against) to labor unions (against) to classified government information being stored in the cloud (for, since Amazon sells cloud services). The libertarians have claimed Bezos, the publisher of Washingtonian has urged him to move to D.C., and Ward 8 Councilmember Marion Barry plans to meet with him soon.
Of course, the Post that’s been operated as a family-controlled business for 80 years had plenty of conflicts of interest of its own. The paper owned by a company that earned most of its money from for-profit education and test prep firm Kaplan Inc. last year also took a hard editorial line in favor of school choice in the District; the editorial page of the paper owned by a family that broke the Post’s pressmen’s union nearly four decades ago hasn’t always been terribly friendly to labor unions since then, either. And for all the love that ex-D.C. cop Don Graham clearly has for the city, it’s telling that the nostalgia that welled up for his mother’s reign as publisher was rooted in the Post’s work on the Pentagon Papers and Watergate (and the accompanying threats from John Mitchell), while its publication under the same ownership of “Jimmy’s World,” the fabricated story on an 8-year-old heroin addict that the Post had to return a Pulitzer Prize for, was mostly elided. In search of readers to replace dropped subscriptions, the Post is increasingly a national paper more than a local one: Buyouts last year, the fifth round in the last 10 years, weren’t offered to Posties covering national beats, while they aimed to cut nearly 10 percent of the local reporting and editing staff.
Ultimately, though, what the sale shows is that some of that Graham nostalgia is pretty well placed: The family decided it had to destroy its newspaper company in order to save the newspaper. (Even if it hasn’t really been a newspaper company for years.) “The point of the family’s ownership, we were brought up to understand this, was always supposed to be that it was good for the Post,” Graham told Post TV. These days, it wasn’t anymore.
Photo by Darrow Montgomery