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Jeff Bezos Buys Washington Post


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http://www.washingtonpost.com/national/washington-post-to-be-sold-to-jeff-bezos/2013/08/05/ca537c9e-fe0c-11e2-9711-3708310f6f4d_story.html

 

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The Washington Post Co. has agreed to sell its flagship newspaper to Amazon.com founder and chief executive Jeffrey P. Bezos, ending the Graham family’s stewardship of one of America’s leading news organizations after four generations.

 

Bezos, whose entrepreneurship has made him one of the world’s richest men, will pay $250 million in cash for The Post and affiliated publications to the Washington Post Co., which owns the newspaper and other businesses.

 

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http://www.washingtonpost.com/national/washington-post-to-be-sold-to-jeff-bezos/2013/08/05/ca537c9e-fe0c-11e2-9711-3708310f6f4d_story.html

 

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The Washington Post Co. has agreed to sell its flagship newspaper to Amazon.com founder and chief executive Jeffrey P. Bezos, ending the Graham family’s stewardship of one of America’s leading news organizations after four generations.

 

Bezos, whose entrepreneurship has made him one of the world’s richest men, will pay $250 million in cash for The Post and affiliated publications to the Washington Post Co., which owns the newspaper and other businesses.

 

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Wonder how this effects the pension plan assets/liabilities.

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http://www.washingtonpost.com/national/washington-post-to-be-sold-to-jeff-bezos/2013/08/05/ca537c9e-fe0c-11e2-9711-3708310f6f4d_story.html

 

...

 

The Washington Post Co. has agreed to sell its flagship newspaper to Amazon.com founder and chief executive Jeffrey P. Bezos, ending the Graham family’s stewardship of one of America’s leading news organizations after four generations.

 

Bezos, whose entrepreneurship has made him one of the world’s richest men, will pay $250 million in cash for The Post and affiliated publications to the Washington Post Co., which owns the newspaper and other businesses.

 

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Quote from the story:

 

In a message to employees on Monday, Don Graham quoted billionaire investor Warren Buffett, a longtime advisor to the Post Co., calling Bezos “the ablest CEO in America.”

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The Washington Post Co.’s newspaper division, of which The Post newspaper is the most prominent part, has suffered a 44 percent decline in operating revenue over the past six years. Although the paper is one of the most popular news sources online, print circulation has dwindled, too, falling another 7 percent daily and Sundays during the first half of this year.

 

I think the above quote from the article might explain why it didn't end up in Warren's hands.

 

The New York Times, controlled by the Sulzberger family, is among the last major dailies still operated by descendants of its early proprietor. It acquired The Boston Globe from members of the Taylor family in 1993 for $1.1 billion; it announced last week it was selling the paper for a mere $70 million to Boston businessman John W. Henry, a businessman who owns the Boston Red Sox.

 

I don't think Warren wants to be like the Sulzberger family selling the Boston Globe for pennies on the dollars after spending $1BIL+ buying the asset.

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Initially, I thought it odd as well that BRK didn't buy the paper.  But I believe it is just more evidence that Buffett's vision for the future of newspapers is not marquise assets in metropolis or national or international papers.  If that was the target, the Boston Globe would have made sense.  If I understand what Buffett has been trying to say about the newspapers that are attractive to BRK is that they must be in markets where there is limited competition to report the community news. 

 

I wonder as well if one of the goals is to save newspapers where they might otherwise fold, and the Post, Globe and their ilk are not yet in danger of collapse.

 

Finally, I am intrigued by Bezos' plans for distribution.  Amazon's capabilities could be a game changer.

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Imagine if you purchased a Kindle and got as part of the purchase from Amazon a free on-line subscription to the Washington Post. I realize that this was not an Amazon purchase. I wonder if we will reach a point where the major tablet/smartphone ecosystems (Amazon, Apple and Google/Android) decide to get into the content business in a major way. However today it currently looks to be a catch 22 (for the hardware manufacturers) as they may get the benefit of the content they purchase but run the risk of having other content providers (competitors) cutting them off.

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Imagine if you purchased a Kindle and got as part of the purchase from Amazon a free on-line subscription to the Washington Post. I realize that this was not an Amazon purchase. I wonder if we will reach a point where the major tablet/smartphone ecosystems (Amazon, Apple and Google/Android) decide to get into the content business in a major way. However today it currently looks to be a catch 22 (for the hardware manufacturers) as they may get the benefit of the content they purchase but run the risk of having other content providers (competitors) cutting them off.

 

Would be a catch 22 for the independents (Samsung, HTC, etc) that are using Android, thus Google's Nexus tablets would get hurt as well.  It would be a net benefit to Kindle & iPad sales where there are no independent hardware manufacturers.  Cheers!

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Guest wellmont

Imagine if you purchased a Kindle and got as part of the purchase from Amazon a free on-line subscription to the Washington Post. I realize that this was not an Amazon purchase. I wonder if we will reach a point where the major tablet/smartphone ecosystems (Amazon, Apple and Google/Android) decide to get into the content business in a major way. However today it currently looks to be a catch 22 (for the hardware manufacturers) as they may get the benefit of the content they purchase but run the risk of having other content providers (competitors) cutting them off.

 

Would be a catch 22 for the independents (Samsung, HTC, etc) that are using Android, thus Google's Nexus tablets would get hurt as well.  It would be a net benefit to Kindle & iPad sales where there are no independent hardware manufacturers.  Cheers!

 

I don't think 95% of users would care about a free sub to wp.

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Guest wellmont

I'm surprised we haven't heard a word from Buffett on this. Do you think he will finally sell his position in WPO now that the newspaper is gone?

 

don't think so. wpo is a better company now. but could this be a larger longer term strategy of liquidating the company?

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Guest longinvestor

Warren (avowed non techie) loves mid town American newspapers , he has bought most of them already

 

Bezos (techie) buys the first big city newspaper - with many more up for sale

 

 

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Good short interview with Don Graham:

 

http://www.niemanlab.org/2013/08/don-graham-on-the-sale-of-the-washington-post-jeff-bezos-and-the-pace-of-newsroom-innovation/

 

Kramer: Do you have any qualms about the Post no longer being owned by someone in DC?

 

Graham: No. Many newspapers, probably most newspapers are owned today by somebody who doesn’t live in the city of publication. I think it’s great when they are … Warren Buffett has bought newspapers this year; he bought the paper in Omaha, where he lives, but he bought the paper down the road in Richmond where he does not. I don’t think anybody’s insulted by having Warren Buffett as the owner.

 

 

Kramer: Although there’s a suggestion today that if the Washington Post was really a good business buy Warren Buffett would have bought it, not Jeff Bezos. My response to that was, ‘I don’t read minds but I would think Warren Buffett would suggest you sell to Jeff Bezos.’

 

Graham: Yeah. Warren’s quite a fan of Jeff’s. I didn’t really know that. I heard him in a large group in January saying he thought Jeff was the best CEO in the United States and I asked his permission to quote him when we went public. He’s a big fan of Jeff’s long-term focus , patience and not being distracted by Wall Street. He certainly won’t be distracted by Wall Street with this because it will be owned privately.

 

 

Kramer: How much does that matter in today’s world?

 

Graham: Even in running a public company, he is unusually long-term focused and unusually resistant to the idea that he should do things for short-term profitability. That’s why Warren says he likes him so much. But that’s also true of Warren himself. You can run a public company and be long-term minded but being a private company takes that out of the conversation altogether.

We have no complaints when it comes to our ability on the long-term. That has not been our problem. Our problem has been that we haven’t come up the right ideas.

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Richard Beddard tweeted this article about Jeff Bezos leadership qualities.

 

Needless to say he thinks larger than someone who's just running a retailer or tech company.  He's not just trying to sell a Kindle to everybody in the world.

When the Kindle was introduced it was with the aim to make “Every book ever printed in any language all available in less than 60 seconds."

 

He also doesn't think like the typical CEO who talks about EPS.

Bezos' 2004 letter is a nice tutorial about the importance of free cash flow rather than GAAP accounting and the importance of maximizing free cash flow per share with high rates of return on invested capital.

 

Embedded at the end of the article is every one of Jeff Bezos letter to shareholders.

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