Friday, May 25, 2018
Business

Amid latest billionaire buys, newspapers still hunt for long-term fix

Will the latest shuffling of high-profile newspapers to new, deep-pocketed owners save an industry still looking for stability and — more to the point — a workable business model?

The announced sales of the Washington Post to Amazon founder Jeff Bezos and the sale of the Boston Globe to Red Sox owner John Henry reinvigorated a national debate. Will the newspaper industry benefit from fresh ideas and investment capital, or merely serve as big-brand trophies for billionaires?

Worth more than $25 billion, Bezos paid $250 million for the Washington Post. It used to be worth billions. The Boston Globe was purchased for $70 million. Its seller, the New York Times, acquired it for $1.1 billion 20 years ago.

No surprise, there's plenty of buzz about the arrival of 49-year-old Bezos. Given his extraordinary Internet success at Amazon, what does he see in the dominant newspaper in the nation's capital that more traditional media owners do not? Surely there's more to this deal than a desire to have a D.C. voice to influence the federal government.

Bezos speculation is rampant. Bezos will accelerate the Post's digital push. Bezos will offer Post content for free on his Kindle readers. Bezos will lower the Post's paywall and underprice competitors.

Nobody really knows. I doubt Bezos knows yet. This is an eclectic guy. How many of us would pay for creation of a clock buried in a West Texas mountain that will tick once a year for the next 10,000 years?

In Wednesday's Wall Street Journal, columnist Holman Jenkins expressed doubt that Bezos' success with Amazon is "any reason to think he possesses a secret juju to make the newspaper business profitable again. But he is rich enough to sustain the Post indefinitely."

Brad Stone, author of the upcoming book The Everything Store: Jeff Bezos and the Age of Amazon, credits the billionaire's love affair with storytelling (Amazon started as a bookstore, after all) and his being inspired by Warren Buffett's long-view investments in newspapers. Buffett was a big investor in the Post and a company director for 25 years. His recent deals include the 2012 purchase of all the newspapers owned by Media General except the Tampa Tribune.

The Tribune (and its riverfront real estate) was bought later in 2012 by Los Angeles investment firm Revolution Capital for a mere $9.5 million. L.A. firm partner Robert Loring was among those trying to buy the Boston Globe and is among those now claiming foul. His $80 million all-cash bid, he says, topped winner Henry's $70 million.

Florida's newspaper industry hardly escaped turmoil. The publicly traded Knight Ridder chain anchored by the now shrunken Miami Herald is gone. The owner of Jacksonville's Florida Times Union suffered through bankruptcy. So did the giant Tribune Co. of Chicago, whose Orlando Sentinel and South Florida Sun Sentinel are still bound for the sales block. Papers in Lakeland, Sarasota and Ocala also have a new owner.

And what of this paper, the Tampa Bay Times? CEO Paul Tash says the private and locally owned paper has been approached over the years by various buyers. But, says Tash: "The answer remains the same: We are not for sale."

Reassuring words in a belt-tightened industry facing disruptive change and eyed increasingly by hungry billionaires.

Robert Trigaux can be reached at [email protected]

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