Top executives at the Washington Post Co. have been concerned for more than 20 years about industry trends that could destroy their flagship product, the
Washington Post,
according to
a lengthy report in the
Post
by Steve Mufson.
Several business decisions the company made over the years have been criticized, the report noted. “But few people have any confidence that different choices would have led to a different outcome,” the article said.
Post Co. chairman Donald Graham and the company’s advisory firm approached Politico owner Robert Albritton, Michael Bloomberg, Carlyle Group co-founder David Rubenstein and former Google CEO Eric Schmidt about buying the
Post
before agreeing to sell the newspaper to Amazon founder Jeff Bezos for $250 million, according to the report.
The report noted that few people thought Graham would be able to “bring himself to sell” the paper. Katharine Weymouth, the
Post
‘s publisher and Graham’s niece, told Mufson that selling the paper was one of three scenarios she described to her uncle late last year.
Mufson’s report noted that the sale of the paper is “in the best interest of the family fortune and shareholders.” Newspaper industry analyst John Morton told Mufson, “This also had major ramification for preserving the wealth of the Graham family in addition to other shareholders.”
Mufson’s report also said that Graham and Wehmouth have had “differences over style and strategy.” The article said some critics have contended that Graham should have looked outside the family to lead the paper during the crisis that swept the industry.
Graham, who votes 86.6 of the controlling A-class shares through his own stock and that in family trusts he oversees, has a strong sense of family and an aversion to conflict and publicity. He does not criticize Weymouth. He has said she needed to make her own choices, even mistakes, without second-guessing from him. Moreover, Weymouth, daughter of Graham’s sister, Lally, had been a favorite of his mother, Katharine Graham.
Mufson wrote that Graham kept his plan to sell the paper a secret from Lally Weymouth until shortly before the sale was announced. “His sister was very upset, acquaintances say, but her work will continue to appear in Slate [a website that is not part of the Bezos sale] and The Post’s Outlook section, though the paper will no longer pay her $300,000 salary,” Mufson’s article said.
“If the Graham family wanted to, it could sink more money into the newspaper instead of diversifying, as it has recently, with small acquisitions in the hospice and boiler ignition businesses,” Mufson wrote. Analyst Morton told Mufson that the acquisition and growth of the Post Co.’s Kaplan education division changed the company’s attitude — the newspaper became less important. The newspaper division represents about 15% of total company revenues, compared with 47% in 1991, Mufson noted. (Source:
Washington Post,
Sept. 27, 2013.)
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