It’s a fire sale in the print journalism industry, and to use a popular analogy, those with digital capital are gobbling up prized publishing assets at the equivalent of 10 digital
cents on the analog dollar. Well, the math may not work out exactly that way, but there’s no question that the sale of three major publishers -- The Boston Globe, Newsweek and The Washington
Post -- in as many days reflects the declining market valuations of important print media, and the rising fortunes of the digital kind.
In the most striking of the flurry of print
media sales, Amazon founder Jeff Bezos announced a deal late Monday to acquire the Washington Post Co.’s publishing assets, including flagship newspaper The Washington Post for
$250 million.
“Um, WaPo market cap is $4.2 billion,” Yahoo Finance user screen-named “r8h234rs” posted on the Washington Post Co.’s stock ticker (WPO)
message board. The user was referring to the current stock market capitalization of the entire media company, which also owns major electronic media outlets and lucrative education industry publisher
Kaplan. In recent Securities and Exchange Commission filings, the company has estimated the value of its publishing division at $256 million, so Bezos only got a small break on its current market
value, but that is down from what historical high?
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No one may ever know that true valuation, although the Washington Post Co.’s overall market value is nearly half of what it
was at its high in December 2004 -- a time when its newspaper business most likely represented much more of its total value.
Asked what the Washington Post Co. might do with the rest
of its media assets, a Yahoo Finance user screen-named langdonsmith quipped: “Maybe the family is going to take a 3.9 Billion dollar loss in the third-quarter.”
While instant news analysis credited Bezos as being a shrewd investor and speculated he might seek to use the paper’s influence to curry policy on Capitol Hill, or possibly to leverage
his personal investment in the paper as part of some ingenious digital publishing strategy, another Yahoo Finance user speculated he acquired the pulp-based publisher because “Amazon needs
a cheap source of packing material.”
People have made such jokes about newspapers having such ephemeral value (wrapping fish, lining bird cages, etc.) as long as there have
been newspapers, and well before the digital age. But something else is going on here -- something ongoing and longitudinal -- that is reshaping the media industry, and the societies and business
interests it serves. And newspapers may just be the canaries in the coal mine.
On Saturday, IAC sold once vaunted weekly magazine
Newsweek to a digital-only publishing company IBT Media,
the parent of the
International Business Times, for lord knows what undisclosed terms, and The New York TImes Co. sold its New England publishing group, including flagship
The Boston
Globe to Red Sox owner John W. Henry for $70 million in cash. To understand how much these print publishing fortunes have fallen, consider that The New York Times Co. originally acquired
The Boston Globe for $1.1 billion in 1993. In other words, it took only 3 analog cents for the current value of digital dollars on that deal.