6 August 2013, 18:03

The Washington Post deal: 'newspapers revert to what they were - trophies of rich men'

The Washington Post deal: 'newspapers revert to what they were - trophies of rich men'

Amazon founder is buying The Washington Post. Jeffrey Bezos will pay 250 million dollars for one of the country’s leading newspapers, which gained worldwide prominence after uncovering the Watergate scandal in the 1970s. The deal brings an end to four generations of ownership by the Graham family and symbolizes the challenges the newspaper industry is facing in the era of digital media. The Washington Post Co. will be changing its name in connection with the transaction. Andrew Gilligan, a senior reporter for the Daily and Sunday Telegraph, talked with the Voice of Russia about the deal and its implications for The Washington Post news org.

Jeffrey Bezos will become the sole owner of The Washington Post when the sale is completed, probably within 60 days. Amazon will have no role in the purchase.

The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latina and Greater Washington Publishing.

Several newspaper executives, including CEO and publisher Katharine Weymouth, will continue in their roles. Bezos says he understands “the critical role the Post plays in Washington, DC and the US”. He promises the newspaper’s values will not change and the duty to readers will remain the top priority.

Donald Graham, Publisher and CEO of The Washington Post, cited mounting financial pressure and reluctance to further cut costs when explaining the decision to sell the newspaper. He says the Post’s revenues had declined seven years in a row, and the introduced innovations had not made up for the revenue decline.

The news comes after the New York Times announced it is selling The Boston Globe and other New England newspapers to Red Sox principal owner John Henry for 70 million dollars. Legendary investor and Berkshire Hathaway CEO Warren Buffet acquired 30 newspapers in the last two years. Analysts say the era of newspapers is not over because they remain valuable content providers.

Why is this news so significant? What does it mean for The Washington Post?

The Post has been in a very significant decline in recent years and it had closed all its US bureaus outside Washington, although interestingly it kept its foreign bureaus open. And it shed staff enormously and a lot of people were worried that it would fade away entirely. It used to be seen as on a par with the New York Times as a kind of a newspaper record. That I think isn’t the case any longer but it is probably good news to be honest that somebody like Bezos is extremely rich and has taken an interest in it. And it fits the pattern we are seeing all over. We are seeing newspapers revert to what they actually were which was kind of like trophies of rich men and rich men are willing to keep them alive despite their losses for the prestige and the influence and for the party invitations that it brings them.

We are seeing that in England as well. We see the Evening Standard and the Independent, the Independent Newspaper was bought by a Russian oligarch Alexander Lebedev. We are seeing it increasingly, we are seeing it as you mentioned in Boston with the Boston Globe bought by the owner of the Red Socks. So, that is probably the way forward for newspapers and I think it got a future, they still do things which nobody else does. They still break the kind of news, still do the kind of reporting, which other media just don’t do and I think there will be the future, probably a smaller future than in the past.

The owners of The Washington Post say the newspaper’s revenues had been declining for seven years. Is there any way to reverse this trend? Will Jeffrey Bezos be able to change that?

I am not sure it matters if he is rich enough to be able to support losses. The Washington Post is a fantastic property. It is still the kind of local newspaper for the most important village in the world – Washington D.C., and it has got its extraordinary history, not very many other newspapers have had Oscar-winning movies made about them and of course that is the paper that brought down the president in 1970s. Most of its money doesn’t come from the paper, it comes from the whole series of education business, because they run business selling teaching materials. That is actually where the money comes from. The papers are kind of prestige brand that makes the rest of it look good, and I think that is the role they will carry on doing. The reason why rich men buy newspapers is to have trophies and because it makes them more important, because it leverages their other businesses. The fact is if you own the Washington Post, everybody is going to invite you to all the parties and that is going to be quite important for the rest of your business because you will be able to hearing for anything else you want to do in the business world. That is how we should see the newspapers in the future and that actually in some way is how they were in the past too.

Would you say that the era of the printed media is over? Are there any advantages that printed media have over digital media?

No, I don’t. I think actually the thing I would like to say about that is that a appeal, the physical and physiological appeal of print shouldn’t be underestimated. If you’ve been staring at the screen all day in the office and if you stare at the screen to check your emails on your blackberry, it is rather restful to go home and look at a piece of paper, rather nice to sit in a chair or sit at a restaurant table or café table or in a pub with a newspaper. So, I think there will always be a market for print. It won’t be as big as it was before but there will always be a market for it.

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