NEW YORK -– When the descendants of Eugene Meyer sold The Washington Post on Monday to Amazon’s Jeff Bezos after four generations of ownership, the once long list of iconic newspaper families dropped down to one: The Sulzbergers.
Arthur Sulzberger Jr., the chairman of the New York Times Company, recently battled down rumors of a deep-pocketed suitor like billionaire Mayor Michael Bloomberg making a play for the paper that’s been in his family’s hands for five generations. “The Times,” he emphatically told The Daily Beast last week, “is Not. For. Sale.”
But neither was the Post -- at least not publicly. Donald Graham, chairman of the Washington Post Co. and son of the late Katharine Graham, stunned staffers Monday by announcing a blockbuster deal that now raises questions about whether the Ochs-Sulzberger clan, dealing with similar industry pressures and digital disruption, might be more inclined to sell.
In interviews with The Huffington Post, analysts and Times watchers say the sale of The Washington Post -- and how that iconic newspaper brand performs under its new owner -- will be closely scrutinized by the Sulzberger clan. While no sudden moves are expected, any initiatives undertaken by Bezos to inject new life into The Washington Post are likely to influence how that family thinks about their long stewardship of the nation’s paper of record.
“You had two premier newspaper families left in the U.S., the Sulzbergers and the Grahams,” said Ken Doctor, an Outsell media analyst and author of the Newsonomics site. “When one of them folds and says, ‘This is too much for us,’ it’s going to send chills to the other one.”
Doctor noted that the New York Times Company has not issued a dividend to its owners since 2009. After a prolonged period of declining revenue, the company appears to have recently stabilized its finances, posting only a small decline in revenue last quarter. But that doesn’t mean the family lacks any heirs to grumble about the fact they could be cashing in on billions if they just sold.
“This decision by the Grahams gives people inside the [Sulzberger] family who’ve wanted to sell ammunition,” Doctor said.
After seven consecutive years of revenue decline, Graham and publisher Katharine Weymouth began exploring the idea of a sale earlier this year. Preliminary discussions took place in the spring, but Graham and Bezos didn’t hammer out details until last month and the deal was only finalized on Monday.
Weymouth told HuffPost that they decided to sell quietly to Bezos for $250 million, rather than potentially bring in a higher offer on the open market, because he was the ideal steward for the paper, bringing both innovation and shared values.
“We wanted to get a fair price for the value we believe we’ve created and for our shareholders,” Weymouth said. “But the goal was not to get the highest bid. The goal was to get a fair price and a good owner for generations to come.”
Investors have reacted favorably to the deal and there hasn’t been the sort of media handwringing that followed the Chandlers’ sale of the Los Angeles Times to The Tribune Co. or the Bancrofts' sale of Wall Street Journal-parent Dow Jones to Rupert Murdoch. There’s a perception, at least, that Bezos will not change the editorial values of The Washington Post, but instead will be a force for needed change and innovation to the business. If the Sulzbergers’ greatest fear is that a new owner would upset the paper’s journalistic traditions, the Post deal could serve as a model.
But Alex S. Jones, co-author of The Trust: The Private and Powerful Family Behind The New York Times, cautioned against extrapolating too much from the Grahams selling the Post to the Sulzbergers’ future plans.
“I was surprised, like everyone, to hear about The Washington Post,” Jones said. “But if I heard The New York Times was sold, I would be truly shocked.”
Jones said The Washington Post has been in a more precarious financial situation and pointed out that the Times has found success with digital subscriptions -- up 35 percent from a year ago to over nearly 700,000. The Times has also unloaded the Boston Globe, he noted, and Mark Thompson, a former BBC director who took over as chief executive late last year, “seems to be cleaning up its balance sheets.”
The Sulzberger family culture, Jones added, is built around being stewards of the Times.
In 2008, New York magazine examined how members of the Ochs-Sulzberger trust are schooled in Times culture, and dozens of them make up the fifth-generation. They begin attending family meetings before the age of 10 years old and by 15, Joe Hagan wrote, “they understand their roles as caretakers of The New York Times.” There’s an orientation session after age 18, along with private retreats and an annual meeting at the paper’s headquarters. The years of indoctrination may not prevent members of the Sulzberger clan from someday breaking ranks, but so far, there’s been no family fissures signaling a change in direction.
Descendants of famous newspaper families have been put to the test in recent years and forced to choose between a quick payday or hoping to find a business model that sustains a legacy print product in the digital age. In May 2007, Murdoch dropped an unsolicited $5 billion bid for Wall Street Journal-parent Dow Jones, and after three months of discussion and debate, members of the Bancroft family agreed to sell.
“I can tell you that a lot of rich people have plunked down huge amounts of money in front of the Sulzbergers and they’ve not bitten yet,” Jones said. “I think never is –- you know, you never say never. But I don’t think so now. I think they feel like they’ve got a future.”
Newspaper companies have collapsed in valuation throughout the 2000s, as competition from digital news companies and other media have taken sometimes lethal bites out of their traditional revenue model. Still, Bloomberg News estimates that, were the Times to be priced using similar multiples as utilized during The Washington Post transaction, the New York newspaper could fetch about $4 billion.
Edward Atorino, a New York-based equity analyst with capital markets firm Benchmark Co., follows developments inside The New York Times Company, and disagreed with the idea The Washington Post transaction would ruffle the Sulzbergers.
“The Sulzbergers operate in their own wavelength, in their own universe,” Atorino said. “They don’t look at things like this at all.”
“I don’t think it has any effect at all, except perhaps for the curiosity of a young Sulzberger,” he added.
Similarly, Craig Huber, managing director of Connecticut-based Huber Research Parners, said the owners of The New York Times were insulated from the kind of pressures faced by their Washington Post counterparts, given The New York Times is a profitable newspaper with $900 million worth of cash on hand.
“Their mission is to keep The New York Times independent and they’re not wavering from that,” Huber said.
Still, even if they are not necessarily looking at The Washington Post sale as a template to follow, at least one media industry expert said both the owners and management at the Times would be closely observing what Jeff Bezos does with his marquee acquisition.
Doctor, the Newsonomics analyst, says he expects Bezos to bring an IT focus to the Post’s operations, using deeper data analytics and commercial applications to improve the typical Washington Post reader experience.
That, more than any amount of money, could make the Sulzbergers broach the idea that The New York Times could do well in the hand of some benign billionaire not named Sulzberger.
“We’re gonna have all kinds of billionaires and multi-millionaires coming out of the woodwork,” Doctor said. “The fraternity that bought and sold newspapers to men of a certain age and pedigree is all but gone.”