The sale comes amid massive changes in the newspaper world, with News Corp just spinning off its publishing assets from the company’s entertainment assets. Traditional publishing companies have been upended by the emergence of digital media outlets, forcing publications like The Washington Post to reconsider their approach to the digital news business.
“All the macro trends in the newspaper industry right now are negative,” said Ed Antorino, media analyst with Benchmark Co. “Advertising is declining, circulation is struggling, most companies are looking to cut costs — The New York Times and Gannett both just posted bad quarters.” The Washington Post Co.’s publishing arm, which includes the newspaper, lost $14.8 million in the second quarter this year, up from a loss of $12.6 million a year ago.
The Washington Post Co. is still liable for pensions for retired employees, while Bezos will take on pension obligations for current employees. The Washington Post is essentially giving Bezos $50 million for current employees’ pensions. In contrast, when The New York Times sold The Boston Globe, it retained all of the employees’ pensions, according to a report by Reuters. Pensions can be a burden for a workforce-heavy newspaper company — Reuters reported that The New York Times’ pension plan was underfunded by $500 million last year — though The Washington Post’s pension plan is fully funded.