Bezos: The perfect newspaper owner
Amazon.com founder Jeff Bezos fished around in his pockets yesterday, plucked out some lint, and used it to buy the Washington Post.
Bezos dropped $250 million in cash on the Post and a collection of smaller papers. That sounds like a lot of money to most folks. It certainly makes the $70 million that John Henry just spent to pluck the Globe from the New York Times Co. look like a pile of change you’d find in a car cup holder. But for Bezos, $250 million is nothing. It’s 1 percent of his reported net worth. He scrounged up most of it selling some stock last week. He’s spending $42 million — more than half what Henry put into the Globe — to build a clock that will last 10,000 years in the Texas wilderness. He builds space travel launch pads and fishes rocket engines from the ocean floor for fun. He can spend $250 million on a storied national newspaper as easily as he can order out for sushi. And that’s what makes him the perfect owner for a major newspaper struggling to win a fight against the Internet.
Bezos and Henry are different than the last round of rich guys who thought it might be fun to buy some newspapers. Sam Zell, for instance, treated the Tribune Co. like one of his real estate deals, loading it up with debt, hoping to make money when the company’s value rose, and instead creating a flaming wreck for the ages. In his New York Times column, Andrew Ross Sorkin paints Bezos and Henry as a pair of anti-Zells, billionaires who buy newspapers not because they’re in it to make huge piles of money, but out of some sense of civic duty. Newspaper analyst Ken Doctor tells Sorkin that “these deals don’t make financial sense,” but Sorkin argues that they don’t have to pencil out on a spreadsheet, because they’re more trophy acquisitions than serious investments: “Some billionaires like cars, yachts, and private jets,” he writes. “Others like newspapers.” (Henry apparently likes all of the above.)
Slate business blogger Matthew Yglesias has long been obsessed with Bezos, because Bezos has been able to run Amazon, a $136 billion public company, like a hobbyist. It’s not just that Bezos seemingly runs Amazon without regard to profit; it’s that he does so while maintaining the confidence of Wall Street investors. When Yglesias calls Bezos’s Amazon “a black hole threatening to devour corporate America,” it’s meant as the highest form of compliment. Bezos is obsessed with his company’s reach and with customer service, to the point where he believes that selling more than ever before and losing money while doing it should count as a victory. The man seems so unmoved by profit motives that Yglesias labeled Amazon as “a charitable organization being run by elements of the investment community for the benefit of consumers.” And if there’s any business that could benefit from a deep-pocketed owner who refuses to measure his holdings by quarterly earnings statements, it’s the newspaper industry.
A legislative committee (along with House Speaker Robert DeLeo) rolls into Pittsfield to hear about the cultural economy, the Berkshire Eagle reports.
CommonWealth’s Paul McMorrow details the fishy business of state Rep. John Rogers and state Sen. Michael Rush, who, in a move of great irony, are using a state affordable housing bond bill to trip up efforts to build affordable housing in Norwood.
Tom Keane decries the gimmickry of state sales tax holidays.
Beverly Mayor Bill Scanlon is leading an effort to seek Beacon Hill approval for more liquor licenses for the town, the Salem News reports.
The state’s gambling commission rejected the application by the owners of Plainridge Racecourse for a slot parlor license over concerns of lax financial controls that allowed the president of the group to withdraw large sums of money unchecked. The Sun Chronicle has local reaction. The commission approved the initial application from Raynham Park, moving that racetrack into the next phase of the competition.
Texas state Sen. Wendy Davis, whose filibuster of a severely restrictive abortion bill catapulted her to national prominence, says she is considering a run for governor to replace outgoing Gov. Rick Perry.
Boston Mayor Tom Menino gives Charlotte Richie a gentle nudge that totally wasn’t an endorsement.
US Sen. Ed Markey is on a listening tour (aka campaign swing) across the state, making a stop in Northampton to meet Mayor David Narkewicz, Masslive reports.
A Worcester woman is planning to redevelop several old buildings into studio space for film productions, the Telegram & Gazette reports. Meanwhile, a group is currently wrapping up work on new studio space at Devens that is scheduled to open later this summer.
A federal judge ordered Quincy officials to pay the legal fees of a business advocacy group after the organization successfully challenged the city’s “responsible employer ordinance” that mandates hiring city residents and their level of benefits.
A tumultuous School Committee meeting in Somerset over an unexpected budget deficit resulted in the suspension of the school superintendent just weeks before the start of classes and the angry resignations of the committee’s chairman and the district’s special education director.
A member of the Andover School Committee shocks his colleagues and other town officials by leading a group proposing an engineering-oriented charter school, one of 10 such proposals across the state, the Eagle-Tribune reports.
UMass Amherst and UMass Lowell ranked No. 9 and No. 10, respectively, in Forbes magazine’s ranking of the best college values in the nation.
George Bachrach and the Environmental League of Massachusetts come under fire for accepting $10,000 annual contributions from NStar, the Cape Cod Times reports.
Thanks to state and federal solar subsidies, a solar developer in Sturbridge is offering the town electricity savings of $2.2 million over the next 20 years, the Telegram & Gazette reports.
Eight coastal communities will begin looking for and identifying invasive species that pose a potential threat to the state’s economy, environment, and public health.
Five years after the arrival of the tree-killing Asian longhorned beetle in Worcester, the battle against it continues.
After yesterday’s closing arguments in the Whitey Bulger trial, the case goes to the jury today.
Monsignor Arthur Coyle, who works in the Merrimack Valley for the Archdiocese of Boston, is arrested for soliciting a prostitute, the Lowell Sun reports.
For the fourth time this year, thieves stole equipment from a community farm in Dartmouth that grows fruit and vegetables for area food pantries.
MEDIARed Sox principal owner John Henry spends nearly five hours at the Boston Globe getting to know the place after negotiating to buy the newspaper over the weekend for $70 million, WBUR reports. NECN also reports on the visit, and has video of Henry and wife Linda Pizzuti getting into their Porsche and driving away. Here’s the Globe account of the visit.
In a note to Washington Post employees, Amazon founder Jeff Bezos says he plans to keep current managers on (including former Globe editor Marty Baron) and not get involved in day-to-day operations, but he says he is excited about reinventing the news business. Time gives four reasons why the Bezos purchase is a sign of hope for newspapers.