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‘Our Future Is Digital’: Don Graham Reflects on Washington Post’s Turning Point

August 6, 2013 at 12:00 AM EST
The purchase of The Washington Post by Internet mogul Jeff Bezos for $250 million will end nearly eight decades of that newspaper's ownership by the Graham family. Donald Graham, chairman and CEO of the Washington Post Company, joins Gwen Ifill to discuss the sale and the future of news media in an increasingly digital age.
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TRANSCRIPT

GWEN IFILL: People in newsrooms and at watercoolers across the country were abuzz today with word that the flagship paper in the nation’s capital is about to be sold to an Internet pioneer.

MAN: It was surprising. Nobody knew it was for sale.

GWEN IFILL: Washington residents and the newspaper industry were still reeling today over news about the news that Amazon founder Jeff Bezos is buying The Washington Post. Publisher Katharine Weymouth, part of the family that owns the paper, said Bezos will pay $250 million for The Post and its smaller publications.

Today, she explained the decision to a Washington Post interviewer.

KATHARINE WEYMOUTH, The Washington Post: This is a transition to a good owner who has a lot he could bring to us, and that we weren’t on the auction block and just auctioned to the highest bidder.

GWEN IFILL: The purchase will end nearly eight decades of ownership by the Graham family. Patriarch Eugene Meyer bought The Post at auction in 1933. His daughter, Katharine Graham, led the paper as it rose to national prominence beginning in the 1970s, first with its coverage of the Pentagon Papers under executive editor Ben Bradlee and then Watergate and Bob Woodward and Carl Bernstein’s Pulitzer Prize-winning reporting that brought down President Richard Nixon.

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PRESIDENT RICHARD NIXON: I shall resign the presidency effective at noon tomorrow.

GWEN IFILL: Her son Donald Graham followed in her footsteps. Subscriptions peaked in 1993 at more than 800,000, but like many other papers, The Post has faced declining circulation and ad revenue in the digital age.

WOMAN: I have been a subscriber before, but I don’t really subscribe to anything any more. I read everything online.

GWEN IFILL: Enter digital giant Bezos. Former executive editor Leonard Downie says the bet is that the online shopping pioneer can ensure The Post’s survival.

LEONARD DOWNIE, The Washington Post: Jeff Bezos understands this new world that we’re in and that all news organizations have to adapt to, whether its Channel 7 or The Washington Post.

GWEN IFILL: The Post is hardly alone in seeking buyers with deep pockets. Over the weekend, Newsweek magazine was sold to IBT Media, the publisher of International Business Times.

Red Sox owner John Henry bought The Boston Globe from The New York Times Company for $70 million. And The Tribune Company’s newspaper division, which owns the Los Angeles Times, Chicago Tribune and The Baltimore Sun, is also on the block.

Donald Graham is chairman and CEO of The Washington Post Company.

He joins me now.

Full disclosure, I worked for you, for The Washington Post.

DONALD GRAHAM, The Washington Post Company: I was going to ask if you were going to disclose your terrible conflict.

GWEN IFILL: My terrible conflict for seven great years in the 1980s.

Ruth Marcus, one of your leading columnists, who sat at this table last Friday night with David Brooks, said that this is a brave and painful decision for your family to make.

Was it also a necessary one?

DONALD GRAHAM: Well, I thought — we thought so.

The publisher of The Post now is Katharine Weymouth. That’s a job that I held when you were on the paper. And I held it for 21 years. But Katharine and I sat down at the end of last year, the end of 2012, looked at how the paper had done in 2012 and what we could reasonably expect going forward.

We — 2013 is the seventh consecutive year the paper has been down in revenues. So what do you do when you have less money coming in the door? You try to start new businesses. You try to innovate. And we have been pretty successful at that. But the decline — not — not successful enough that the total decline didn’t continue.

GWEN IFILL: A 44 percent decline.

DONALD GRAHAM: Well, you’re going back over several years there. But that’s right.

GWEN IFILL: Yes.

DONALD GRAHAM: And, mostly, we have had to cut costs. The year of the financial crisis, 2009, was a very challenging year for us.

Katharine and her team then brought the paper back to cash flow profitability the last three years. We certainly wanted to remain profitable, but last — around New Year’s Day of this year, we started to ask yourselves for the first time whether it was possible that there was another owner who would be better for The Post than our company had been.

GWEN IFILL: When you say that, does that mean that there are things that you did or didn’t do over the last several years you wish you had that you didn’t have the vision to see?

DONALD GRAHAM: Well, the one sentence that I think everybody in our building and everyone in this building would agree with, Gwen, is every year in the future, a few more people, a higher percentage of people, will read their news online or on mobile devices, just like the woman whose video clip you showed at the start of this segment, and slightly fewer people will read in print.

The Post print circulation remains abnormally high for a metro daily. We’re the number eight TV market in the country, but our paper is basically tied for first in circulation, print circulation, with The Los Angeles Times, which is in a much better market.

GWEN IFILL: If you’re…

(CROSSTALK)

GWEN IFILL: Go ahead.

DONALD GRAHAM: But, you know, we started to think to ourselves, for example, the technology sophistication of somebody like Jeff Bezos far surpasses mine.

When I started on the paper when we were still using Linotype machines and lead type, not altogether dissimilar from what Ben Franklin was doing in the 18th century. So, Jeff’s technology skills may be a little greater than mine.

GWEN IFILL: So, among your suitors, of which there were more than a few, Jeff Bezos was appealing to you because he’s a digital native. Is that a part of it?

DONALD GRAHAM: Well, I have known Jeff Bezos for 15 years.

He is — is and is known to be an extraordinarily decent man. I know him. And I have got the joy of getting to know his wife a bit. And it starts with that. He’s principled. He’s also a reader and a very good writer, as his statement to our staff, which has been widely quoted, reflects. He wrote that himself. He writes Amazon’s annual shareholder letter by himself.

He’s known for being a very patient long-term investor, as he was with Amazon itself, as he was with the Kindle and as he has been many other times, so — and he — I don’t want to appear to be speaking for Jeff, but he did speak for himself in his letter yesterday. He’s not going to walk in the door with solutions. But he will walk in the door ready to try things.

And Jeff — if you’re Jeff Bezos or his peers, the founders or CEOs of great Internet companies, you know a lot of great technologists.

GWEN IFILL: And, in fact, your publisher and your editorial page editor and your executive editor will stay in place for now.

DONALD GRAHAM: Oh, Jeff has asked the whole management team to stay on. And that includes Katharine Weymouth, but it also includes Marty Baron, the editor of The Post, and Fred Hiatt, the editorial page editor, who has been on your program.

GWEN IFILL: You know, I worked with four newspapers altogether over time. And I’m not the only one in the business and out of the business who wonder whether this isn’t a turning point, when a great family-owned newspaper hands itself over to someone who doesn’t have anything to do with journalism, at least doesn’t have any history in that.

DONALD GRAHAM: Well, I hope it is.

Jeff had fully as much to do with journalism in his previous career as Eugene Meyer, my grandfather who bought The Post in 1933, having never worked a day on a newspaper and never having owned a business. But he had great mid-20th century skills. His skills were financial. He had made — he had been an investor. He had made a lot of money on Wall Street.

And then he had been a senior government official, and because his ethics were pretty high, he had stayed in government bonds during the depression. So his ethics got him, not his investing skill, got him through. 

But he tried things. He tried to improve the paper. He tried to make it better, tried to grow circulation, tried to grow advertising. Jeff, who is also a very skilled businessman, is going to come in and as he — the word he used was experiment.

GWEN IFILL: I heard you tell your staff that you have been in that building one way or the other, in some job or the other, for 42 years. So…

DONALD GRAHAM: I first was in The Washington Post building in January 1949 to see Harry Truman’s inaugural parade when I was 3.

GWEN IFILL: Well, there you go.

So, tell me, what do you think this means or what any of this means, not just you, but what’s happening with Tribune, what’s happening with these other papers? What does this mean for the future of newspapers as we have come to know them?

DONALD GRAHAM: Well, I think, obviously, the Post is in a different position from other newspapers.

We have a slightly different business than they do, because we’re in the nation’s capital. We have an Internet following that’s pretty large relative to the size of Washington as a market, because we’re in the capital free world. And we try to report on what goes on here and what goes on around the world that is relevant to decisions in Washington.

We’re an independent newspaper. Our editorial page is not consistently down the line with either the Democratic or Republican parties. And so we’re — our business is a little bit different. But I think what it means is that The Post is going to be an extraordinarily exciting place to be. I can’t imagine a news organization being a more exciting place in the immediate future.

GWEN IFILL: What does it mean that we see so many print properties being sold to wealthy individuals, rather than to multigenerational families?

DONALD GRAHAM: Jeff is more than a wealthy individual. He is somebody who had an idea 15, 20 years ago, crazy idea that he could successfully sell books on the Internet.

He’s a reader and he’s a writer. Unusually, out at Amazon, meetings don’t start with slide presentations or PowerPoints. At Jeff’s request, they start with whoever convenes the meeting writing an essay. The first 10 minutes, everybody sits down and reads what the person convening the meeting wrote.

Why? Because he thinks writing requires thought. So that is a little tribute to the power of the written word. This is a very fine business executive. The Post’s great friend Warren Buffett has called Jeff the best CEO in America. And he’s also an extraordinary — he’s extraordinarily thoughtful. But obviously, Gwen, for you and for me, we know a ton of our future is digital. And that’s what Jeff brings.

GWEN IFILL: Well, then I want to put on your big think hat and tell me whether you think there is a generational shift going not only among readers of the newspaper, but also owners of newspapers.

DONALD GRAHAM: Well, again, I hope so.

I’m 68 years old, so I’m not going to be — you know, I’m going to be at the soon-to-be-named — renamed Washington Post Company for quite — for some time, I hope. But it’s — you know, by bringing somebody like Jeff Bezos in as the owner of The Washington Post, we’re, I think, creating an opportunity for the readers of The Post, for those who work there.

It could become — I think it will become — a very exciting place. We’re going to keep doing what we have done. We have got the skills of the people in the building, plus the skills of Jeff Bezos.

GWEN IFILL: Let me ask you a blunt question.

(CROSSTALK)

DONALD GRAHAM: Do you want to know about your pension plan?

GWEN IFILL: Not really.

(LAUGHTER)

GWEN IFILL: I want to ask you the question that one media analyst said, that you lucked out in getting Jeff Bezos, because it may save the paper. Is that what you’re doing now? Are you saving the paper? Are you saving the journalism?

DONALD GRAHAM: No, I think the paper would have survived. If we had not sold it, the paper would have survived fine under our ownership under the current company.

We would have had to keep cutting expenses as long as revenue fell. And our aspirations for The Post have always been way more than survival. We want to succeed. We want to expand. We want it to be a great place, in the way that I think means something to you.

GWEN IFILL: Don Graham, CEO of the soon-to-be-renamed Washington Post Company, thank you so much.

DONALD GRAHAM: Thank you so much, Gwen. Good being with you.