The (Sigh) News About The News

The news business in America has been in the news a lot recently, and unfortunately the news is pretty much all bad.

Two of our most storied newspapers, the Washington Post and the Boston Globe, have been sold for a small fraction of their value only a decade ago.  The New York Times, which bought the Globe in 1993 for $1.1 billion, sold it to billionaire John Henry for only $70 million.  What’s worse, the Times retained liability for the Globe’s pension obligations, which reportedly total more than $100 million.  If you do the math, that means the Times basically lost its entire $1.1 billion investment over 20 years.  Although the Times tried to justify its sale as an effort to focus on its core “brand,” it’s obvious the sale sought to unload a money pit that the Times didn’t know how to turn around.

The Washington Post and related publishing businesses were sold to Jeff Bezos, the founder of Amazon, for $250 million.  Although the price was higher than the pittance paid for the Globe, it still shocked the journalism world because it was much lower than the Post‘s expected value and because it ended the long-time ownership of the Graham family.  Both the Post and the Globe have been troubled by the same trends that have plagued other newspapers — declining circulation and a business model based on paper, with all of its attendant costs, when the rest of the world is moving full throttle into digital communications.

In addition to the fire sale prices paid for these two legendary publications, recent journalism news has seen continuing layoffs of reporters, editors, and other members of newspaper staffs.  Last week, for example, the Cleveland Plain Dealer laid off about one-third of its editorial staff.

One sign of the desperate times in the news business is the effort to see the silver lining in Bezos’ purchase of the Washington Post.  Some people in the journalism industry hope that Bezos, who has taken Amazon from an on-line bookseller to its current status as an ever-expanding conglomerate powerhouse, may be able to figure out what has stumped others in the journalism business:  how to make the daily newspaper something that everybody will read, and happily pay for, again.

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