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Bezos Overpaid For WP, Value Fell 87% In 10 Yrs

From Bloomberg:

Bezos Paid a ‘Friendship Premium’ for the Washington Post

By Edmund Lee, Brooke Sutherland & Tara Lachapelle | August 7, 2013

Jeff Bezos’s purchase of the Washington Post may look like a steal, yet it came at a rich valuation that newspapers such as the New York Times Co. (NYT) may only dream of obtaining.

The founder of Amazon.com Inc. (AMZN) plunked down $250 million for the Post newspaper division, about 17 times adjusted profit, according to data compiled by Bloomberg. That multiple implies a valuation for the New York Times of about $4 billion — more than double its current market value. Major metropolitan newspapers should fetch 3 or 4 times profit, said research firm Outsell Inc.

And, despite its dreams, the Washington Post is nowhere near worth even half as much as the New York Times. It is not really a national newspaper.

“Bezos paid a friendship premium of $200 million here,” Ken Doctor [sic], a media analyst at Burlingame, California-based Outsell, said in a phone interview. “There are a handful of news brands in the world that will merit some kind of premium over the usual multiple, but the multiple over the multiple here seems really high.”

The value of newspapers has been cratering since Rupert Murdoch paid $5.2 billion for Wall Street Journal parent Dow Jones & Co. six years ago. The New York Times, the last major U.S. family-owned newspaper, has seen its market value fall 50 percent to $1.8 billion since the Dow Jones deal was announced as print advertising dropped and readers migrated to the Internet for news..

Bezos, independent of Amazon, is buying the Washington Post as well as other papers from the parent company, including the Express, the Gazette Newspapers and Southern Maryland Newspapers. The Washington Post Co. is keeping Slate magazine, TheRoot.com, Foreign Policy and other non-newspaper assets, including the Kaplan education division.

Well, even friendship only goes so far. Who in their right mind would want Slate or Skip Gate’s race-baiting operation, ‘The Root’?

Here is more on the sale, via Breitbart:

Fire Sale: Washington Post Lost 87% of Value In Ten Years

By John Nolte | August 7, 2013

… [I]n an era when the Washington Post sells Newsweek for $1 and the New York Times sells the Boston Globe at a 93% loss; $250 million might sound like a lot of money. But buried in the Post’s own reporting of its sale is the news that ten years ago the Post would have sold for $2 billion with a -B-.

That represents an 87% loss in just a decade. You figure in ten years of inflation and we are probably over  90%.

Like most print media outlets, the Post has had to struggle with the rise of the Internet and competition from New Media. That certainly hurt its value, but the Post is also guilty of a number of unforced errors that resulted in untold damage to the credibility of its once legendary brand.

Over the years, the fake fact checks, the apparent coordinating with the Obama campaign to destroy Romney, the phony smears leveled at Republicans, the non-stop pushing of leftist causes, the unforgivable stealth-corrections, the laughably biased polls… All of this added up in a way that devastated the Post’s credibility and left it a shell of itself…

You can’t wade into an online world where competition is everywhere and behave in this way. When people have options, they are not going to stand for the absurd deception that they are paying for and giving page views to an "objective" news outlet.

To millions and millions of potential customers, the Post became something that wasn’t vital; something they no longer trusted. Millions more see the Post as an outright antagonist out to undermine who they are and what they believe in.

In a free market, when you alienate most of the customers, you end up on the wrong end of a fire sale.

It’s also hard to be a national newspaper when you only speak to liberals, who are less than half the country. Especially, since the liberals are already wedded to the New York Times.

As if to prove the Breitbart article’s point, the Washington Post ran this embarrassing puff piece today:

Obama’s top five zingers on ‘The Tonight Show’

By Ruth Tam | August 7, 2013

5. “It was a sad state of affairs. A bunch of old guys.  Where is the Ibuprofen and all that stuff.” -On his 52nd birthday basketball game with high school and college friends

4. “No. That’s why we’re celebrating our 21st anniversary.” -On if he teases first lady Michelle Obama when she makes fun of his gray hair.

3. ”She’s been there before … She doesn’t have to measure them.” -On whether former Secretary of State Hillary Clinton started measuring the White House drapes at their recent lunch.

2. ”Well, I mean, that’s how a classic romantic comedy goes.  You know, initially you’re not getting along and then you keep on bumping into each other.” -On what Jay Leno called a “bromance” between him and his 2008 rival John McCain.

1. “It goes especially well with burgers and fries.” -On his favorite food, broccoli.

And they wonder why the paper isn’t worth anything these days.

This article was posted by Steve on Wednesday, August 7th, 2013. Comments are currently closed.

3 Responses to “Bezos Overpaid For WP, Value Fell 87% In 10 Yrs”

  1. GetBackJack says:

    If the Democrat Party didn’t arrange this Sale, I’ll eat your hat.

    Data Mining/2016 Project. Because Amazon has more data on Americans than the NSA.

  2. heykev says:

    Actually, here’s what really happened (sarcasm – funny article)
    Amazon Founder Says He Clicked on Washington Post by Mistake


  3. Enthalpy says:

    The Washington Post’s predicament has little to do with what Bernstein suggests is a need for a marriage between great journalism and “this new culture.” As Rush said yesterday, people who use Amazon like Amazon. Amazon’s customer service is very good. Unfortunately, the Washington Post will bring with them all of the attributes that have brought them their present failures. There is no great journalism at the Washington Post. If a newspaper doesn’t value objectivity and truth, there’s litttle danger of finding either of them.

    Don’t bet the farm on this marriage.

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