Despite the challenges, a new class of investor appears to be investing in U.S. newspapers. These owners have deep pockets, and are a throwback to the early days of print when rich industrialists controlled the press in order to push their political agendas.
Boston Red Sox owner John Henry just bought the venerable Boston Globe from the New York Times Co. for $70-million, a fraction of the $1.1-billion the Times paid for the paper in 1993, returning the paper to local ownership. And billionaire investor Warren Buffett has been snapping up small local papers for a couple of years now, based on his belief that they are uniquely positioned to serve their citizens in a way national media simply cannot.
“In towns and cities where there is a strong sense of community there is no more important institution than the local paper,” he said. “The many locales served by the newspapers we are acquiring fall firmly in this mould.”
Mr. Buffett paid about $2-million each for the dozens of papers he acquired (or as one analyst noted, the price of a nice house in each of those cities). The low selling prices reflect the uncertainty facing the industry, but also present a chance for new owners to step in without the heavy debt loads that once characterized such deals.
There haven’t been many Canadian sales since an 85-per-cent stake in The Globe and Mail was sold to the Thomson family’s Woodbridge Co. Ltd. for an undisclosed amount in 2010. There was one major transaction – Postmedia Network Inc. sold the Victoria Times Colonist, two other daily papers, dozens of weeklies and all of their related real estate to Glacier Media Inc. in 2011 for about $85-million.
In Mr. Bezos, the newspaper industry is getting an online pioneer who has invented business models and isn’t sentimentally attached to the paper he now controls. Henry Blodget, chief executive officer and editor of the Business Insider website that Mr. Bezos has helped fund, wrote that the Amazon executive already understands subscription businesses and could be looking to package the Post’s news with its Kindle e-readers. He could also be looking at newspapers as an established delivery system that could help Amazon get goods to consumers quicker.
“Could stuff ordered from Amazon be delivered with your morning newspaper? Why not? And your daily newspaper – or parts of it – could certainly be delivered in a box with your Amazon stuff,” he wrote. “I doubt that Bezos is really interested in the print version of the Post, but as long as it exists, it might be fun to fiddle with. In short, there are lots of cool synergies that Jeff Bezos and Amazon might want to experiment with.”
Mr. Bezos hasn’t provided a lot of insight to his thinking just yet, other than to say he’d give the newsroom’s 650 journalists a one-year reprieve from layoffs as he figures things out. For veterans such as the Watergate-scooping Bob Woodward, that’s as good a promise as they’ve heard in years.
“Jeff Bezos seems to me exactly the kind of inventive and innovative choice needed to bring about a recommitment to great journalism on the scale many of us have been hoping for – while employing all the applicable tools and best sensibilities of a new era and the old,” he wrote. “The Washington Post is the ideal place for it to happen.”
If it does, writes James Fallows in The Atlantic, it could spark a renaissance in journalism. “So let us hope that this is what the sale signifies: the beginning of a phase in which this Gilded Age's major beneficiaries re-invest in the infrastructure of our public intelligence,” he wrote. “We hope it marks a beginning, because we know it marks an end.”