There was a time in America when industrial tycoons would buy newspapers to be their playthings, using the editorial pages to reward friends and punish enemies, all while watching healthy profits from subscriptions and advertising roll in. Then a couple of decades ago, the newspaper industry began an era of consolidation, with firms like Gannett and the Tribune company scooping up one small and mid-size paper after another. The results were usually awful for journalism; if your local paper got bought by one of those behemoths, there's a good chance the newsroom would be gutted and you'd end up with a paper with little enterprising reporting and lots of wire stories.
But now the billionaires are back. Last week the New York Times company sold The Boston Globe to Red Sox owner John Henry. Warren Buffett's Berkshire Hathaway has quietly bought a couple dozen small papers, making him one of the largest newspaper owners in the country. And yesterday The Washington Post announced that the Graham family, which had owned the paper for the last 80 years, is selling it to Amazon.com founder Jeff Bezos for $250 million. So is this a good thing?
I think it is, for a couple of reasons. As innumerable people pointed out yesterday, Bezos has a history of sinking untold millions into an unprofitable company, so he'll feel right at home owning the Post. It's an obvious joke, but it contains a truth: Bezos' business success derived largely from his patience and willingness to make large investments that wouldn't pay dividends for years. The worst thing for a newspaper is an owner obsessed with quarterly profits and the price of the company's stock; Bezos won't worry about either one. And he has almost infinite resources (Forbes puts his wealth at $23.2 billion).
There was a time when newspapers were a great business to be in, but that time has passed. There are still papers that make profits, but they're more likely to be smaller ones that can maintain a local advertising base, or papers that serve defined communities that rely on them, like non-English-language papers. It's the large and medium-sized papers that have really struggled since Craigslist killed classified ads (which used to make up a huge portion of revenue) and readers were drawn away by the Internet. Few papers have fallen as precipitously as the Post. Here's how the New Yorker's David Remnick described the situation: "The trends were violent and undeniable. Graham and Weymouth saw circulation drop from 832,332 average subscribers, in 1993, to 474,767. The newsroom staff was once over a thousand; it is now around six hundred and forty. The paper is still capable of extraordinary journalism ... But the Post is clearly a diminished version of its old self. It is still serious and grounded, but not quite essential in the way its rival, the Times, remains." The Washington Post Company's newspaper division lost $34.5 million in the first quarter of 2013, and if Bezos has a plan to turn the Post into a profit machine, it's surely a plan that would take many years to succeed.
There's no way to know yet what kind of changes Bezos would bring, but there are lots of worse entities or people the paper could have been sold to. He's not an easily categorizable figure, neither all hero nor all villain. From what little we can tell, his politics seem to be standard in the tech industry: socially liberal, economically ruthless. Amazon has been a mixed blessing for Americans—a gargantuan amount of consumer convenience created, to mention one thing; the endless despair and exploitation of the fulfilment center, to mention another—but no one denies that Bezos is an innovative thinker. Could he create some new newspaper model that would continue to produce vital journalism and make enough money to be sustainable? Who knows. But he has as good a chance of doing it as anybody.
Maybe Bezos will fail, but the Post was on a downward spiral, and if he hadn't bought it, its days could well have been numbered. As James Fallows said, "So let us hope that this is what the sale signifies: the beginning of a phase in which this Gilded Age's major beneficiaries re-invest in the infrastructure of our public intelligence. We hope it marks a beginning, because we know it marks an end."