The masthead of the Washington Post contains these words: “An Independent Newspaper.”
When word spread that Jeff Bezos, the billionaire founder of Amazon, was buying the Post for $250 million, attention focused on the word “newspaper.” Bezos once predicted that printed systems for delivering information would probably disappear in 20 years. But even the wizard of online commerce could not suggest specific ways to rescue an enterprise that’s been losing money for seven years.
“I don’t want to imply I have a worked-out plan,” Bezos told a Post reporter. “This will be uncharted terrain and it will require experimentation.”
The word “independent,” however, is as critical as the word “newspaper.” The two are obviously connected, and any news outlet has to attract income in order to survive. Don Graham, the Post’s chairman, admits that he failed to solve the economic challenges of departing advertisers and shrinking subscribers.
“I did want to find a way to make a Washington Post that was healthy and prosperous,” he told blogger Erik Wemple. “I didn’t do it and I disappointed myself.”
(Full disclosure: Graham has been a good friend since college and Steve regularly reviews books for the Post.)
But the concept of independence goes beyond income and relates to the ownership structure. If a paper is part of a publicly traded company, the pressures to be “healthy and prosperous” are severely increased by the expectations of the marketplace.
Investors measure success by two metrics: profit and stock price. And while the Graham family retains a controlling interest in the company, they have sold stock to the public since 1971. They are not immune from the demands of their stakeholders, and as losses mounted, so did those demands.
Katharine Weymouth, Don’s niece and the current publisher, says the family was forced to reach an unhappy conclusion: “If journalism is the mission, given the pressures to cut costs and make profits, maybe (a publicly traded company) is not the best place for the Post.”
Enter Bezos, who is buying the Post by himself and taking it private. He does not have to answer to anybody, on Wall Street or anywhere else, and the purchase price represents about 1 percent of his net worth. Now that’s independence.
Ted Leonsis, who like Bezos made a fortune as an Internet pioneer, told the Post that the deal “allows the paper to be invested in and transformed outside of the harsh light of Wall Street demands.”
The problems that the Grahams are encountering now were actually presaged more than 13 years ago by Katharine Graham, Don’s mother, who preceded him as publisher. In an article called “Journalistic family values” in the Wall Street Journal, she made the argument for private ownership of news outlets.
“It seems,” she said, “that certain attributes essential to quality are more easily provided by families than by public companies.”
Yes, family-owned businesses are “vitally interested in profits,” she wrote, but not only in profits. Information is not just a commodity, it’s a core element of a healthy democracy. It’s also very expensive to produce, and private owners have more freedom than public companies to invest in quality newsgathering.
Katharine Graham inherited the Post — and her value system — from her father, Eugene Meyer, who, she wrote, “felt the Washington Post should be prepared to make financial sacrifices, if necessary, for the public good. People at the company today share his view that we have a responsibility to put long-term service to readers ahead of short-term financial gain.”
It’s that kind of service that the Grahams could no longer afford to provide. And that’s why they sought a buyer like Bezos, who could.
But independence is not just about money. It’s also about integrity, and the willingness and ability to hold powerful forces to account. As Katharine Graham wrote, “family ownership provides the independence that is sometimes required to withstand governmental pressure and preserve freedom of the press.”
Exhibit A: The Post’s refusal to crack under intense White House pressure during its investigation of Watergate. At the time, Katharine Graham recalled, “Friends of the Nixon administration filed challenges to our television licenses in Florida. These cost a fortune to defend and caused our stock to plummet. A company without a very strong ownership may have found these costs too great to bear.”
The Post is truly “An Independent Newspaper.” Jeff Bezos has to understand the profound importance of those words and provide both the cash and the courage to keep it that way.