Hold the Presses

The move to Southern California, back in 1981, was odd – especially for a bookish English teacher. This was not a place for words, even if Ray Bradbury had been living down in Long Beach since he was a young boy. The place was visual. That was the beach where Gidget surfed. That hillside was the one the Lone Ranger had ridden down, over and over. That old bank building in the middle of Hollywood was the Daily Planet Building in the old Superman series – it even looked kind of black-and-white. Raymond Chandler had written those wonderful hard-boiled detective novels set in Hollywood and Santa Monica, but everyone remembers the great noir films of those tales – Humphrey Bogart, as his Phillip Marlowe, trading quips with Lauren Bacall in The Big Sleep and that sort of thing. Everyone saw the stories. Few read them. Out here the printed word didn’t matter. That stuff was just raw material for moving images. Now and then the characters had to have something to say.

There were two morning newspapers at the time, but only one or two of us living at the beach, the oddballs, heard each arrive with a satisfying thump at the front door each morning at dawn. No one else cared, but news on the radio was just snippets of this and that, and the evening news on the three major networks was a half-hour of simplistic overviews, less the time the commercials ate up. The internet was a decade away and CNN had only started up the year before, and cable was fairly new anyway. Fox News and MSNBC would come much later – so if you wanted to know what was going on, the daily printed word was it. It gave you most everything, in some detail – and the want-ads were thick with jobs, and the multipage display ads were elaborate. Everything was there.

That couldn’t last. The Los Angeles Herald-Examiner was the first to go – an evening paper during the week and a morning paper on the weekends, and then a morning paper all week, and then gone. It had started out as a vanity project anyway – William Randolph Hearst founded it in 1903, because he wanted the presidential nomination on the Democratic ticket back then and he thought he could slant the news his way. That didn’t work, but as part of his newspaper empire it lived on. It made money, but it had to compete with that other vanity project, the Chandler family’s Los Angeles Times – historically very right-wing and anti-union and able to get things done in the city at will. It was a newspaper and a political operation. Those folks created Richard Nixon for America back in the late forties and early fifties, but since then have drifted a bit to the center, or even, sometimes, the left. Still, they buried the Herald-Examiner, which folded in 1989, as advertisers made the choices about where they’d look better, leaving the Los Angeles Times the newspaper of record out here. Their endorsements still matter.

Those endorsements won’t matter much longer, as the Los Angeles Times is dying. In 2000, the Tribune Company acquired the Times, so it kind of merged with the Chicago Tribune and their other holdings, like the Chicago Cubs, then in December 2008, the Tribune Company filed for bankruptcy protection. This wasn’t going to work, and it was a leveraged buyout anyway. Led by Sam Zell, the Tribune Company loaded up the Times with massive debt, borrowing vast amounts of money against its assets to pay for the cost of buying it in the first place, in the manner of Mitt Romney’s Bain Capital. If it turned around, things would be fine. That debt could be retired – but as with most of such efforts that turned out to be painful, then impossible. Costs had to be cut. The weekly book review went first, then the Sunday magazine, then a quarter of all the reporters, and then half of them. The paper got thinner and thinner each morning – there wasn’t much there. The idea was that a lean-and-mean operation would mean big profits – there’d be no slack. Yes, but there was no real newspaper anymore. It became no more than a minor delivery system for full-color supermarket inserts, with coupons. Circulation fell off a cliff. Now the libertarian Koch Brothers seem to want to buy the newspaper. It might be marginally useful in making Scott Walker or Rand Paul, or Glenn Beck, our next president – but if they buy the Times its circulation will drop to zero. California is a deep blue state and Los Angeles even deeper blue.

It’s a mess, but it wasn’t the leveraged buyout that killed the Los Angeles Times. The times killed the Times – now, with the internet, anyone can read news from anywhere, any old time, for free, and if you want endless discussion of policy and national and international events, cable news has you covered, twenty-four hours a day. You can print your own coupons on the net, and if you’re looking for a job, or a used lawnmower, those are all on the net now. The want-ads section disappeared long ago, along with the tiny-print tables of stock quotes. The printed word is passé – the days of William Randolph Hearst are long gone. Now no one buys newspapers to rule the world, or come close.

There was a movie about those days – Orson Welles’ Citizen Kane – filmed in 1941 down at the old RKO studios at Melrose and Gower. That movie really pissed off William Randolph Hearst, because it was about him – a ruthless newspaper tycoon who wants to control everything, by controlling what the public gets fed to them. It was horrifying, and compelling, in a sick sort of way. Hearst banned every newspaper and radio station in his media empire from reviewing or even mentioning the film, and somehow had some movie theaters ban it too – they dared not cross him – but that only helped Welles market the thing. All this may seem silly now, but at the time the printed word was almost all that mattered, as he who controlled the printed word controlled everything.

Those days are gone forever. Every major news story now generates thousands of blog posts – words that confirm or counter or question or elaborate the facts of the story – and every major news story is first available online, almost all of them for free, with each primary news source giving a slightly different version of the basic facts. It’s a free-for-all. John Foster Kane or the real William Randolph Hearst would have no leverage now. Living in Southern California might be like walking though scene after scene of old movies and televisions shows – the visuals are all there – but no one buys newspapers anymore. There’s no point. No matter what the visual cues, you’re not reliving Citizen Kane.

Fine, but it seems America is reliving Citizen Kane:

The Washington Post Co. agreed Monday to sell its flagship newspaper to Amazon.com founder and chief executive Jeffrey P. 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 get a new, still undecided name and continue as a publicly traded company without the newspaper.

This was a shock:

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, an institution that has covered presidents and local communities and gained worldwide attention for its stories about the Watergate scandal and, in June, disclosures about National Security Agency surveillance programs.

Post Co. chairman and chief executive Donald E. Graham and Post publisher Katharine Weymouth, his niece, broke the news of the sale to a packed meeting of employees at the company’s headquarters in downtown Washington on Monday. The mood was hushed; several veteran employees cried as Graham and Weymouth took turns reading statements and answering questions. “Everyone who was in that room knows how much Don and Katharine love the paper and how hard this must have been for them,” said David Ignatius, a veteran Post columnist who was visibly moved after the meeting.

No one knows what to make of this, but the times killed the Post too. The guy from Amazon, the web giant, may be the right man to keep the Post up and running, somehow, if he cares to, and he, like Welles’ Kane, can do what he wants:

Bezos, 49, will take the company private, meaning he will not have to report quarterly earnings to shareholders or be subjected to investors’ demands for ever-rising profits, as the publicly traded Washington Post Co. is obligated to do now. As such, he will be able to experiment with the paper without the pressure of showing an immediate return on any investment. Indeed, Bezos’s history of patient investment and long-term strategic thinking made him an attractive buyer, Weymouth said.

He’s free, and the old ways are gone:

The New York Times, controlled by the Sulzberger family, is among the last major dailies still operated by descendants of an early proprietor. It acquired the Boston Globe from members of the Taylor family in 1993 for $1.1 billion; it announced last week that it was selling the paper for a mere $70 million to Boston businessman John W. Henry, who owns the Boston Red Sox baseball team.

It’s a new world, and the reactions varied, with James Fallows hoping for the best:

The money required to run a news organization is, for this era’s new wealthy, relatively modest. I haven’t stopped to do the comparisons, but I bet that the investment Jeff Bezos is making (and will need to increase, if he wants to revive the paper) is modest compared with what a previous era’s Rockefellers, Carnegies, and Fords decided to put into their universities and foundations. 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.

Ezra Klein, with his WonkBlog that generates the most traffic at the Post’s website, sizes up his new boss:

The case against Jeff Bezos – if you’re a reader of The Post – is that Bezos owns one of the largest and most influential companies in America.

Amazon’s political interests extend across everything from state sales taxes to the minimum wage to trade with China. It’s doubtful that Bezos intends to aggressively use The Post to advance Amazon’s legislative goals. But over time, who knows? The Post has had to navigate similar tensions in recent years with our Kaplan [educational testing] division, but this will be of a new scale.

In the New Republic, Marc Tracy says not to worry:

In the end … the combination of Bezos’ business interests and his lack of prior political commitments (he is no George Soros or Sheldon Adelson) probably militate against him doing too much. If he turns the Post into a far-left or far-right newspaper (or, more likely, an annoyingly libertarian-ish one), he risks alienating Amazon consumers who will not bother with the distinction between that company and its CEO.

Slate’s Matthew Yglesias is simply puzzled:

Journalism-as-vanity-project-for-rich-guy has a long and storied tradition in America, but it’s a bit of an odd fit in the sense that Bezos has no personal ties to the city of Washington. His memo to Post employees confirms that he has no intention of moving to D.C. to run the paper on a day-to-day basis, and he says the Post “already has an excellent leadership team.” Beyond that, he doesn’t give much hint as to his plans.

Yglesias can stay comfortably puzzled. Slate wasn’t included in the sale.

Someone who is not comfortable is the New Republic’s senior editor Alec MacGillis:

The public discussion of newspapers’ decline tends to focus on circulation, but newspaper people know that the devastation came as much on the ad side and above all in the lowly classifieds, which in their humble agate type had for decades delivered a disproportionate share of newspaper revenues. This was where the digital revolution first exacted its toll – how could you keep charging $10 a line for a used car or apartment or job listing when there was a guy who was letting people post ads for free online – all the while subsidizing that operation by charging $5 or $10 for prostitution ads of the sort no respectable daily newspaper would ever think of running (the law eventually made him shut it down, but not before it was bringing in $36 million per year).

Craigslist’s Craig Newmark has not bought the Post, thank goodness – that would be too much to bear. But Amazon’s Jeff Bezos as the white knight provokes only slightly less shock and dolor. We knew the other guys had won a long time ago, but it’s another thing when they can waltz in and, in the charmless guise of “Explore Holdings LLC,” drop $250 million in cash for a paper (that’s a mere one percent of Bezos’s net worth)…

There are already hopeful noises coming out of the corner of 15th and L about Bezos as owner, compared with other possibilities. He is promising independence. He is, for now, keeping the leadership team in place (let’s hope in particular that he keeps editor Marty Baron, under whose leadership the paper has been doing some notably hard-edged and influential journalism). His politics are not visibly objectionable. But let’s not kid ourselves here. The company that made him one of the richest men in the world has had a less than benign impact on our nation. It has devastated the publishing industry, from the big presses to the small booksellers. It has exacerbated the growth of the low-wage economy, to the point where the president feels the need to celebrate an increase in warehouse jobs that will pay barely more than minimum wage. (Fun fact uncovered by the Morning Call in Allentown, Pa. two years ago: Instead of paying for air-conditioning at some Pennsylvania warehouses, Amazon had just stationed paramedics outside to take the inevitably heat-stressed workers to the hospital.)

That’s the whole point:

More generally, Amazon has embodied, more than any other of the giants that rule our new landscape, the faster-cheaper-further mindset that scratches away daily at our communal fabric: Why bother running down to the store around the block if you can buy it with a click? No risk of running into someone on the way and actually having to talk to them, and hey, can you beat that price? No thought given to the externalities that make that price possible – the workers being violently shocked every time they pull a book off the warehouse shelf, or losing a chunk of their lunch break to go through the security checkpoint set up by their oh-so-trusting employer. They’re Somewhere Else, working for a company that is Out There, in the cloud.

That’s not to say things had been peachy:

The Grahams are a remarkable Washington family, and I was as grateful as any of my fellow reporters for the notes that would occasionally arrive from Don with a kind and utterly sincere word for a piece he had liked. But we also should bear in mind the many decisions that can be second-guessed in hindsight – among many others, the decision not to make the paper national in scope and distribution, like the New York Times and Wall Street Journal; to keep the online operation separate as long as it was; to hold off so long on instituting a paywall. And we should most definitely not forget the failure to prevent what unfolded at the company’s Kaplan education division, which was raking in huge profits from for-profit colleges with a highly dubious business model; when those improprieties were exposed and the Obama administration proposed new rules to protect students and taxpayers from being exploited, Don Graham went to Capitol Hill to lobby aggressively against them, seemingly unaware that his indubitable virtue as grandfather of the Post did not necessarily transfer to this other realm.

Now the Grahams can go back to doing as they see fit with Kaplan, without worry that they are in any way imperiling the newspaper’s public trust. That trust has been passed to Jeff Bezos, who will hopefully treat it with more care than his company did those heat-stricken workers deemed undeserving of an air-conditioning system. I avoid buying from Amazon as best I can, but I’ll keep subscribing to my old paper as long as they keep printing it…

That’s a bit sour, but then there’s Salon’s Andrew Leonard:

For Jeff Bezos, it was pocket change. With an estimated personal net worth of $23.2 billion, $250 million for the Washington Post isn’t even blink-worthy. In the circles Bezos runs in, that kind of price tag measures a minor acquisition — it’s a quarter of what Facebook paid for Instagram or Yahoo paid for Tumblr. …

But for the journalism business, to call this an earthquake is like, well, it’s like calling Amazon just another bookstore. The Washington Post is one of the premier newspapers in the English-speaking world: the most important publication in the capital of the planet’s greatest superpower. The symbolic importance of the Bezos acquisition is impossible to escape. No single company embodies the disruptive, brick-and-mortar-smashing force of the Internet more fully than Amazon. Now we’ve come full circle. The iceberg just rescued the Titanic. After grinding the newspaper industry beneath its steel-tipped boots, the Internet suddenly turned all sweet and sugar daddy.

He’s serious, and offers this way of looking at the new Citizen Kane:

Bezos is a man who knows how to lose money. Amazon did not become profitable for seven years after its IPO. Just last year, Amazon lost $39 million. Amusingly, the most recent quarterly filings for both Amazon and the Washington Post Co. have WaPo making a profit of $5 million on total sales of $959 million while Amazon lost $7 million on total revenue of $12.8 billion. (Of course, the Washington Post’s profits presumably are mostly generated by its educational testing subsidiary Kaplan, which is not part of the sale.)

One can well wonder how Jeff Bezos managed to become a billionaire 20 times over while presiding over a company that has lost money in more years than it has made money. The standard explanation for why Wall Street hasn’t left his company riddled with bullets on the stock exchange floor is that Amazon’s losses stem from Bezos’ determination to invest heavily in the future. In the long run, Wall Street seems to think, we will all buy everything from Amazon – and that should earn the company a tidy profit … in the long run.

Yeah, yeah, but to paraphrase Keynes, in the long run we’re all former employees of shuttered brick-and-mortar bookstores and employees of publishing houses who lose money on every Amazon sale and writers who will never earn out our piddling advances because Amazon has made it impossible for anyone but Amazon to make money from publishing. In other words, we’re all dead. But the point is this. Love him or hate him, Jeff Bezos has never paid even the semblance of lip service to Wall Street’s insistence on pumped-up quarterly earnings statements. That’s the kind of owner today’s newspaper desperately needs. He can wait out a wrenching period of technological transition longer than anyone this side of Bill Gates or Warren Buffett.

There’s also this:

And come on, the guy sells a lot of books, right? According to the Post’s own coverage of the sale, we are told that Bezos likes newspapers – he reads the Post, the Wall Street Journal and the New York Times. He’s a huge fan of the printed word! OK, maybe “printed” is the wrong word to describe the kinds of words that Mr. Kindle is a fan of, but still – he understands that readers gotta read. So why not just keep a newspaper around for kicks?

Why not? And the web guy, part of the crowd who destroyed newspapers, may be the right guy:

So now Bezos is giving a little bit back, putting some money down to prop up a cultural institution that has provided great value for many decades, and maybe, just maybe, with a little tinkering, a little more innovation, a little steadfastness and a whole lot more capital investment, could keep shining its light for a few decades more. Let’s see other people follow his example! The Carnegies and Mellons and Fords and Rockefellers left us a great cultural heritage. Bill Gates, maybe you could buy a big music recording studio? Mark Zuckerberg, why not get Random House back from Bertelsmann. Internet moguls to the rescue! You know you want to. …

I also kind of love the audacious robber-baron feel to it – I had no idea tycoons like that still walked the earth.

It seems they do – and that old and odd feeling is there again, as if one is walking through some old movie, somehow happening now. Someone should ask Jeff Bezos if he once had a sled named Rosebud.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
This entry was posted in Jeff Bezos Buys Washington Post, Newspapers Dying and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s