WASHINGTON -- The Washington Post Co. has agreed to sell its flagship newspaper to Amazon.com founder and chief executive Jeff Bezos, ending the Graham family's stewardship of one of America's leading news organizations after four generations.
Bezos, whose entrepreneurship has made him one of the world's richest men, will pay $250 million in cash for The Post and affiliated publications to the Washington Post Co., which owns the newspaper and other businesses.
Seattle-based Amazon will have no role in the purchase; Bezos himself will buy the news organization and become its sole owner when the sale is completed, probably within 60 days. The Post Co. will change to a new, still-undecided name and continue as a publicly traded company without The Post thereafter.
The deal represents a sudden and stunning turn of events for The Post, Washington's leading newspaper for decades and a powerful force in shaping the nation's politics and policy. Few people were aware that a sale was in the works for the paper, whose reporters have broken such stories as the Pentagon Papers, the Watergate scandals and disclosures about the National Security Administration's surveillance program in May.
For much of the past decade, however, the paper has been unable to escape the financial turmoil that has engulfed newspapers and other "legacy" media organizations. The rise of the Internet and the epochal change from print to digital technology have created a massive wave of competition for traditional news companies, scattering readers and advertisers across a radically altered news and information landscape and triggering mergers, bankruptcies and consolidation among the owners of print and broadcasting properties.
"Every member of my family started out with the same emotion--shock--in even thinking about" selling The Post, said Donald Graham, the Post Co.'s chief executive, in an interview Monday. "But when the idea of a transaction with Jeff Bezos came up, it altered my feelings."
Added Graham, "The Post could have survived under the company's ownership and been profitable for the foreseeable future. But we wanted to do more than survive. I'm not saying this guarantees success but it gives us a much greater chance of success."
The Washington Post Co.'s newspaper division, of which The Post newspaper is the most prominent part, has suffered a 44 percent decline in operating revenue over the past six years. Although the paper is one of the most popular news sources online, print circulation has dwindled, too, falling another 7 percent daily and Sundays during the first half of this year.
Ultimately, the paper's financial challenges prompted the company's board to consider a sale, a step once regarded as unthinkable by insiders and the Graham family itself.
With extraordinary secrecy, Graham hired the investment firm Allen & Co. to shop the paper, company executives said. Allen's representatives spoke with a half-dozen potential suitors before the Post Co.'s board settled on Bezos, 49, a legendary tech innovator who has never operated a newspaper.
Bezos, in an interview, called The Post "an important institution" and expressed optimism about its future. "I don't want to imply that I have a worked-out plan," he said. "This will be uncharted terrain and it will require experimentation."
He said, "There would be change with or without new ownership. But the key thing I hope people will take away from this is that the values of The Post do not need changing. The duty of the paper is to the readers, not the owners."
Despite the end of the Graham family's control of the newspaper after 80 years, Graham and Bezos said management and operations of the newspaper would continue without disruption after the sale.
Post publisher Katharine Weymouth--Graham's niece and the fourth generation of her family involved in the newspaper--will remain as publisher and chief executive of the Bezos-owned Post; executive editor Martin Baron will continue in his job. No layoffs are contemplated as a result of the transaction among the paper's 2,000 employees, who will be told of the sale at a company-wide meeting Monday afternoon.
Bezos said he would maintain his home in Seattle and would delegate the paper's daily operations to its existing management. "I have a fantastic day job that I love," he said.
In a note to Post employees on Monday, Weymouth wrote, "This is a day that my family and I never expected to come. The Washington Post Company is selling the newspaper that it has owned and nurtured for eight decades. "
Bezos' reputation and smarts made him attractive as a buyer of The Post, said Weymouth. "He's everything we were looking for--a business leader with a track record of entrepreneurship who believes in our values and cares about journalism, and someone who was willing to pay a fair price to our shareholders," she said.