Major Newpapers Are Now Cheap Enough to Be Toys for Rich People

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The Washington Post is my new pony.Photo: EMMANUEL DUNAND/2011 AFP

The decision by Amazon founder and space explorer Jeff Bezos to buy the Washington Post for $250 million in cash has been met with speculation from all sides about what exactly he has to gain by owning a newspaper — political influence, delivery routes, digital synergy? — but the truth is it doesn't matter: The Post's price tag is barely 1 percent of Bezos's net worth (hovering around $25 billion), and even that was "generous," in the words of David Remnick. (Post veteran Gene Weingarten said it was "about as risky and consequential a purchase for [Bezos] as a used 2003 Honda Civic might be for me.") The truth is, the era of major print publications as mammoth businesses is all but over, and now that their worth on the open market is reflecting that reality, a new generation of the moneyed elite is picking them up, for cheap, as playthings — in the same category of purchases as, say, a yacht or a tiny island.

In the simplest sense, it marks a transition in the role of newspapers in the modern economy. When Warren Buffett bought a major chunk of the Washington Post in the early seventies, there was no notion that it might have been for any other reason than to make money. When the Sulzberger-owned New York Times paid $1.1 billion for the Boston Globe twenty years ago, it was a business move. The families that owned major papers — the Sulzbergers, the Grahams, the Bancrofts — were not astronomically wealthy people who did it as a side project. Rather, they were rich people who were tethered to a certain industry, and the newspapers they owned represented the bulk of their wealth. Even if they could be good journalistic patrons, they still, fundamentally, had to make the publications they owned work as businesses.

For decades, owning a first-tier American print publication has been a vocation — now, suddenly, it's an avocation.

"I'd guess that Jeff Bezos thinks that owning the Washington Post will be fun, interesting, and cool. And my guess is that, if that is all it ever turns out to be, Jeff Bezos will be fine with that," wrote Henry Blodget, whose Business Insider counts Bezos as an investor. "This is a man who invests in rockets and atomic clocks, after all. He doesn't necessarily make these investments for the money. Or bragging rights. Or strategic synergies."

Red Sox owner John Henry went the same route with the Globe: When his investing partners pulled out, Henry bought the paper by himself for just $70 million — more than 90 percent off from what the Times Co. paid in 1993. (Circulation, now below 250,000, is less than half of what it was when the Times bought it, but Henry likely cares more about what the paper means to Boston than its national reach.)

It's no accident that is happening now: The superrich hold a greater share of the country's total wealth than they have for a very long time, and the value of publications has fallen off a cliff.

Even several years ago — when the plummeting fortunes of the news business already seemed like old news — things were different. Rupert Murdoch's News Corp. bought The Wall Street Journal (via its parent company Dow Jones) in 2007 from the Bancroft family, who'd owned the paper since 1902, for $5.6 billion and was responsible (to some extent, anyway) to shareholders for making the move work. Murdoch, a dedicated lover of newsprint, has always been willing to suck up the losses of his beloved papers, but News Corp.'s shareholders were not so forgiving — this year, he was forced to split the publishing unit from his more profitable entertainment businesses.

Bezos, who bought the Post by himself, will face no such pressures. By taking the company private, he'll have no antsy investors to placate and, as he famously did with Amazon, can absorb the losses — mere rounding errors in his net worth — that come with innovating for as long as he wants.

The cachet that comes with owning a publication with a long and burnished legacy seems to be contagious. Facebook boy-millionaire Chris Hughes bought the relatively tiny New Republic and named himself editor-in-chief, indicating that the allure of the printed word matters to generations beyond the 82-year-old Murdoch's. "Why bother?" Hughes wrote today of Bezos following his lead from Silicon Valley to journalism. "Is he acting out of simple vanity or is there some business insight that he has that others don't? (The same questions have been asked of me since I bought The New Republic.)" But Hughes's answer is telling: "Brands matter. The wonder and magic of institutions like the Post or The New Republic is their history — their stories track the American story." A brand like the Post's "worth," in a nonmonetary sense, far outweighs its actual price. How could Bezos resist? That kind of cultural legacy is more exciting to own than a Cezanne, which can also set you back nine figures.

Journalists, meanwhile, are willing to shrug and hope for the best. Counting on a traditional model of ad sales and circulation rate ended in heartbreak, layoffs, and closures at the turn of the last decade, so a benevolent patron model, especially one with Bezos's promise not to meddle, is a welcome experiment. (It's also, in some senses, an update to the bygone era of newspapers as family businesses.) Of course, any owner would like to make a profit, but if that's not the primary concern, at least for a while, the hope is that journalism can flourish — at least, as long as Bezos continues to find owning a newspaper amusing.