Can Billionaires Like Jeff Bezos and John Henry Save Newspapers?
Over the past few weeks, the newspaper industry in the United States was jolted into shocked awe from the news that two news giants, the Washington Post and the Boston Globe, were bought by billionaire investors. Jeff Bezos, the CEO and founder of Amazon and Silicon Valley tech magnate, purchased the Washington Post from its parent company the Washington Post Co. for $250 million. The New York Times Company, on the other hand, sold the Boston Globe to John W. Henry, owner of the Boston Red Sox and Liverpool FC for $70 million.
The purchases reveal that the media world of yesterday has not lost all hope. With many newspapers shutting down and losing subscribers, the investments by Bezos and Henry uncover the true potential behind classic media. With these newspapers, the billionaires have shown that they believe there is still an untapped reservoir behind these platforms, their teams, and the communities they inspire. Where many had predicted the fall of newspapers this decade, Bezos and Henry just made a $320 million bet that they can transform the ancient giants into 21st century powerhouses of news media.
Some have speculated that the purchases are attempts at gaining influence, particularly Bezos's purchase of the Washington Post. But this argument falls flat rather quickly. Bezos would not have access to alter any of the content that the editors decided to print, so it is unlikely he could shape the voice of the Washington Post enough to gain any sort of power among the political forces in D.C. Rather, he will probably face the occasional critique from his own newspaper on Amazon and Silicon Valley (Amazon has a $600 million contract over cloud computing with the NSA).
Businessweek writer Brad Stone believes that experimentation in the media world may be the real factor in the equation Bezos considered when buying the Washington Post. In an interview with the New Republic, Stone said, "So there's plenty of room and opportunity for new models to be created. We're so dominated in our world by our media organizations getting smaller and losing money, and yet to him it's always been clear that this is an opportunity for more experimentation."
With John W. Henry, his statement may have revealed that his interests also lie in investing in the Boston community. Henry stated, "This is a thriving, dynamic region that needs a strong, sustainable Boston Globe playing an integral role in the community's long-term future." Bezos said in an interview last year that he believed nobody who used the web for news would buy a subscription to a newspaper in print. It seems that Bezos invested in order to actively transition the Washington Post into becoming a more active web presence. Henry and Bezos both like the cut of each of their respective newspapers' teams, and it seems their purchases were motivated by gaining the power to shape the newspapers in new directions.