The first was the announcement that The Boston Globe was being purchased by John Henry, owner of the Boston Red Sox,
and formerly the founder and manager of a hedge fund that once held as much
as $2.5 billion in financial assets.
The second was the revelation that The Washington Post was purchased by Jeff
Bezos, founder of Amazon, and a person who, like John Henry, had also managed a
hedge fund on Wall Street.
The Globe was
picked up from the New York Times Co.
for the bargain-basement price of $70 million.
In 1993, the Times Co. bought
the Globe for a cool $1.1 billion.
Additionally, citing “several former high-ranking Globe executives,” the Boston based paper reported on August 2nd that “The Times Co. . . . withdrew a large stream of cash from the Globe during its ownership, a sum at least equal to the purchase price.”
Additionally, citing “several former high-ranking Globe executives,” the Boston based paper reported on August 2nd that “The Times Co. . . . withdrew a large stream of cash from the Globe during its ownership, a sum at least equal to the purchase price.”
Also, the News
Consortium reported that John Henry’s “straight
cash deal” for the Globe does not
include assumption of its pension liabilities, estimated at over $100 million.
Probably the most stunning development associated
with these two newspaper deals, though, is the sale of The Washington Post to Jeff Bezos for $250 million in cash.
Arguably, the Post
has as much, if not more influence over the coverage and reporting of what goes
on inside Washington’s Beltway, than does The
New York Times.
An indication that this assumption may have some
meat on its bones comes from a story in The
New York Times on August 5. It posits
that “Critics of Amazon were aghast at
the news of The Washington Post purchase, saying it would further increase the power of a company and a tycoon
they think already has too much of it.”
The article claims that “rivals and critics were already concerned that the newspaper’s work
would be used to help Amazon.” To
that I say, what of it?
The report continues to fret about this transference
of media power to Mr. Bezos, an acknowledged successful entrepreneur, marketing
genius, and technological whiz, by quoting Dennis Johnson of Melville House as
follows:
“It’s an old story – rich man buys a
newspaper – but in this instance it’s one of the richest men ever buying one of
the most important newspapers ever, which is the one our government leaders
read first thing every morning.”
OK, Mr. Johnson, what would you have: a person of meager resources buying it with
too much financial leverage and who may proceed to bleed it out; somebody with
no power, no business acumen; someone with no passion for bringing entrepreneurial
skills to an entirely different challenge?
Jeff Bezos and John Henry will apply new, refreshing
perspectives to an industry undergoing a major life-threatening adaptation to
the digital age.
It needs the support of allies, not internal
grousing about new people coming in to help.
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