Jeff Bezos Beat Other Bidders for the Washington Post
Jeff Bezos wasn’t the only one interested in buying the Washington Post. But he was “the best and highest bidder,” according to a person familiar with the transaction.
The Post’s parent company shocked much of the media business today by announcing that the Amazon CEO will buy its namesake paper for $250 million. The news follows a bidding process conducted by media bankers Allen & Co., which saw several buyers take a run at the paper.
But like many media companies, the Post is a public company that is run in many ways like a private business. And the Post would have been unwilling to sell it to “the wrong person,” my source said. It’s worth noting that Warren Buffett, who has been on a newspaper buying spree himself, already owned 23 percent of the Washington Post company. (Also worth noting: Earlier this year Bezos invested $5 million in Henry Blodget’s Business Insider.)
In a letter to employees, published on the Post’s Web site, Bezos announced that he won’t be “leading the Washington Post day-to-day.” But he also suggests that the man who used technology to permanently change the retail industry has big plans for one of America’s most storied newspapers. “There is no map, and charting a path ahead will not be easy. We will need to invent, which means we will need to experiment.”
A few other details that are not in the press release announcing the deal, but can be found in the accompanying SEC paperwork:
- The Post is selling the paper and its name — meaning the Washington Post Company will have to be called something else. But it is not selling the real estate associated with the paper, which means that Bezos will be paying rent to the paper’s former owner.
- Unlike other media companies, the Post has an overfunded pension plan, not an underfunded one. But the Post will still be giving Bezos what amounts to $50 million to help pay off the costs of his new employee’s pension liabilities. Bezos will be responsible for current Post employee’s pensions, while the old company will be responsible for retired employees’ pension.