Billionaire Bezos Buying the Washington Post Ushers in a New Era of Plutocrat Publishing
Amazon.com founder Jeff Bezos bought The Washington Post — a newspaper no one knew was for sale — on Monday, in a move with enormous implications for not just the news, digital, and retail industries, but for the future of democracy in America.
The Washington Post sale makes it much more likely thatThe New York Times, the world’s most influential newspaper, will be sold next year to New York City mayor Michael Bloomberg, who leaves office Jan. 1 with no announced plans for the future. Bloomberg, whose income runs more than $1 billion annually, chafes at how his Bloomberg company terminals are the nerve centers of Wall Street, but his solid (and deadly dull) news operation has less influence than some Internet pipsqueaks.
Bloomberg, like Bezos, has the very deep pockets needed to invest in the news business and devise a model suited for the Digital Age. Both men also have a long-term vision focused on wealth creation, rather than quick profits, and on affecting the body politic rather than enjoying a life of idle decadence.
Meanwhile, the Koch brothers may buy the Los Angeles Times, Chicago Tribune and other newspapers. With Rupert Murdoch in control of The Wall Street Journal, we could see a new age of publishing titans duking it out for readers, but in a world where readers are much more sophisticated and have access to other sources of information than in the yellow journalism era more than a century ago when Hearst and Pulitzer invented news to sell papers, or the Red Scare era when the Chandlers of Los Angeles effectively invented Richard Nixon and pushed him toward the White House.
It would be a huge public benefit to restore actual competition among news organizations in which ideas, policies and facts about how government and the economy perform actually got thrashed out in public.
If we are lucky we may even enjoy the many benefits of aggressive and skeptical reporting, instead of the stenography that Aaron Sorkin skewers on HBO’s The Newsroom.
While the new world of digital commerce and Internet news distribution opens new opportunities, taking advantage of them requires the aforementioned deep pockets. Neither the Grahams of Washington nor the Sulzbergers of New York have much economic muscle anymore, thanks to the creative destruction of the digital economy compounded by their own mismanagement.
A basic tenet of business is to give people more for less, yet for decades publishers raised prices while cutting the physical dimensions of the printed page and the size of the news staff, while paying the established talent (including me) to go away because they could not afford us anymore.
More profit for less product is not a sound strategy. It is, instead, a way to milk the business so when you sell out, the damage is less than it appears.
Bezos paid just $250 million for the Washington Post, close to pocket change for the Seattle mogul.
Last week the Sulzbergers sold the Boston Globe and other New England properties for $70 million, just four cents on the inflation-adjusted dollar they paid in 1993. It is no coincidence that the record high price for a newspaper was paid for the Boston Globe in 1993, the year the first Internet browser, Mosaic, opened the World Wide Web to an audience beyond the scientists and geeks who communicated in arcane code.
The New York Times is likely to sell for less than a half-billion dollars, even though it is so beloved by readers that they now bring it more money through circulation and Internet fees than advertisers pay to reach them, an exceptionally educated and thoughtful audience.
The problem here is not a thirst for news. Demand is great and growing, especially as the world becomes ever more complex and the federal government accretes power, secret power, to itself through massive spying and lying as well as reducing public access to information, an issue far too few journalists have reported on.
The problems are revenue and adjusting the newsgathering and delivery mechanisms to the times without violating the principles of sound journalism.
The biggest newspaper moneymaker – classified ads – has moved to Craigslist and the like. Old man Pulitzer called those ads “mustard,” a reference to the piles of tiny seeds that are needed to make the yellow condiment. Traditional publishers do not know how to get those ads back, but perhaps Bezos and Bloomberg will figure it out or come up with new revenue streams.
In the age of the printing press, where your newspaper was located mattered. You could put out a fine newspaper in Des Moines or Minneapolis; Delta, Mississippi or Watsonville, California, but you would have no measurable influence beyond the most distant porch where your paper was delivered each day.
The Los Angeles Times, where I worked from 1976 to 1988, spent a fortune delivering morning copies to every member of Congress, as well as opinion makers in Manhattan. It even briefly distributed same-day papers in Beijing, forcing earlier deadlines for hometown news, or at least so said a memo on the newsroom bulletin board to which I attached a proposed new slogan (which management quickly took down):
Bezos, Bloomberg and the Kochs are all multi-billionaires with proven focus on long-term wealth creation rather than 90-day profits reports, which thanks to creative accounting has ruined many American companies in the last three decades.
These plutocrats do not share the same views of the world, though all see the world from the viewpoint of riches far beyond their political influence.
Bezos, for example, gave $2.5 million to support making same-sex marriage legal in Washington state and he is a strong backer of Senator Patty Murray, one of the few actual liberals still in the Senate, a supporter of working people and their economic interests. Consider that in contrast to the union-hating Kochs, who think what America needs is lower pay for workers.
The Kochs are libertarians born with platinum shovels in their mouths, and see no irony in how their profits are enhanced by government-granted monopolies (pipelines), subsidies (for their energy businesses) and huge tax favors they seek through financing Cato, Heritage and other “think tanks” that are in reality ideological marketing arms of the far right.
The Mad Men who work for the Kochs craft slogans and simplistic ideas to get the people harmed by these policies to buy them like so many cigarettes and super-sized fries.
Bloomberg is in favor of stronger public health and safety regulations, for which Murdoch’s Fox News (er, Faux News) ridicules him as it shills shamelessly for the new Republicans.
Unfortunately, Bloomberg’s views extend to thinking it is all right to stop young men on the street and frisk them because of the color of their skin, an abuse of individual liberties under examination in federal court in Manhattan right now. That gives us some hint of how in Bloomberg’s hands what is at least for now still the world’s most influential newspaper would report, and opine, on the world.
The sale to Bezos included an announcement that Fred Hiatt will stay on as editor of the Washington Post editorial pages, where he has presided over narrow, right wing columns (mostly by white males) who favor war, tax cuts for the rich and getting tough on those who hold government accountable through unofficial leaks. The torrents of officialleaks, on which the Washington Post has long depended, are another matter.
But once the sale goes through, Hiatt may be gone, which would be one of the greatest benefits of new ownership.
Just as Rupert Murdoch said he would preserve the integrity of the Wall Street Journal’s news pages, and then started eroding that reputation to slant news in favor of his rightists as I and many other seasoned press critics have shown, once Bezos is in control, the paper will be his to run as he sees fit.
If Bezos treats the Post the way he does Amazon, you can expect better than we got under Donald Graham, who spent eight years as a street cop in Washington and who has focused increasingly on private profits, not public benefit, and on producing a cautious news report that sticks to the official version of events (see Woodward, Bob).
Publishers, by the way, do not intrude directly in the newsroom, which would be like trying to herd cats — neurotic and very smart cats.
Instead, publishers set the tone by the top editors they pick. And while the Post newsroom has had solid executive editors –Len Downie, Marcus Brachuli and now the much-celebrated Marty Baron – that Hiatt remained and his opinion pages are so heavily biased in favor of the rich and of white skin in a city with a large and poor black population screamed about Donald Graham’s values and those of his niece, Katherine Weymouth, who is momentarily publisher.
Bezos, for almost two decades, has worked to transform the way Americans shop. He started in 1994 with books and now his company is a great river of commerce offering just about everything for sale, delivered to the homes and offices of frequent customers in two days. For seven years, Amazon never made a dime.
One thing you can be certain of, the Kindle app on the Washington Post and its online e-replica are about to get a lot better. Bezos, a Washington Post insider told me, sought Donald Graham’s advice on how to make the appearance and features of the Kindle work smoothly. Bezos now has the better digital product.
Bezos also stands out because while his company earns razor-thin profit margins, the value of the owners’ stake — known as equity — has been growing a rapid clip.
Pre-tax profits last year were less than a penny on the dollar of sales, compared to 35 cents on the dollar at Apple, 25 cents at Google and a more than nickel at mass market retailer Walmart.
Yet from 2009 through last year the equity shareholders had in Amazon exploded, up 55 percent.
Bezos has also been one of the most aggressive avoiders of taxes, especially retail sales taxes, which finance much of state and local government in America.
We won’t know what kind of a publisher Bezos will be until after he’s had the paper under his control for a while. After all, it took Rupert Murdoch a bit of time to begin transforming the solidly reputable Wall Street Journal news pages into an increasingly right-tilting view of the news, in which editors are known to count how many sources quoted in stories are from each party. They often find too many Democrats (and even traditional “country club Republicans”) are quoted, while not enough space is devoted to Tea Partiers and zealots, many of whom have no facts to back up their rhetoric (but are rarely called on their fantasies in Murdoch’s Wall Street Journal).
What we can expect is that new owners, not tied to the four-century-old history of printing presses, will have new ideas and new approaches.
What we should hope for is a new age of competition for the news, competition that tells us more than the official version of events and the official criticisms of the official version of events.