Tuesday, August 6, 2013

The sale of the Washington Post

The sale of the Washington Post, the flagship daily of the American capital is a stunning event but gives a lot of food for thought.

What was the train of thought of Donald Graham, the head of the family that owned the newspaper for 80 years? It seems one can give some answers right now.
Don Graham realized that there were no short term solutions for the continuous decline of the famous daily. Its circulation has gone down from 830000 copies in 1993 to 430000 copies in 2013. its advertising revenue has not stopped falling since 2006 and if the group is profitable thanks to local TV stations, the newspaper keeps losing money and will stay in the red for the next few years. Its digital policy is far less successful than the New York Times's.

Also, the chairman knew that its family was at wit's end and had no solution to offer to stop the decline. So, last december, he started to look for an investor who had deep pockets and a genuine interest in newspaper business. Jeff Bezos seems to fit. He is worth 25 billions dollars so the price of the Post for 250 millions amounts to just 1% of his fortune. Moreover, he is deeply involved in digital economy and he has shown he is willing to invest long term. His firm, Amazon has lost a lot of money for many years before breaking even.

So the decision of Don Graham is courageous and  thoughtful. He wants to save the Post, he is fair enough to understand that his family cannot do the job anymore and he picks up a man who has energy, ideas and money.

It is a big lesson for the European press. What is Murdoch, who is 80, going to do with his troubled British newspapers, the Times and the Sun? What are going to do the Amaury family with le Parisien and l'Equipe and the Lemoine family with Sud Ouest?
It is the end of a certain model of the print industry.