Why do rich people buy newspapers?

By Quentin Langley

Newspapers have generally been a pretty good way of blowing a fortune. Apart from a brief flirtation with profitability following an agressive pricing policy in the 1990s, The Times has been losing money for well over a century. Rich men have become a great deal less rich by 'investing' in newspapers. 

Among the possible reasons, I suppose:

  • It is probably an ego boost for people like Robert Maxwell to put themselves on the front page.
  • It may enable people to push a political agenda or to advance other business interests.
  • It may enhance the power of a business portfolio, boosting the profitability of other brands sufficiently to make up for the losses.
  • They may imagine they have a new business strategy that will make the newspaper profitable.

Which of these apply to Jeff Bezos, the purchaser of the venerable Washington Post? He is not someone who has tried to make himself the story. His personal profile is much lower than that of his business, Amazon. I doubt we will be seeing front page stories about how amazing he is. Bezos has some interest in political issues. He made a large donation to boosting the cause of gay marriage in Washington (state, not DC). His donations to political candidates, however, have infrequent, modest and split betweent the parties. He has donated more frequently to Democrats, but also to a couple of Republican senators. Mostly, but not exclusively, the donations have been to candidates in Washington state. Despite his passion for gay marriage and space flight, he has shown no great desire to be a player in national politics before. 

Could this be about boosting Amazon? Possibly, I suppose, but it is notable that the Post has been bought by Bezos and not by Amazon. He doesn't seem to be planning to integrate the businesses.

Could he have a new business model in mind for newspapers? That does seem possible. He is the person who has revolutionised the sale of books. Newspapers have already been experimenting with all sorts of revenue models. Has Bezos got something new in mind? Or is it merely that he has deep enough pockets to keep the Post afloat until the revenue models reach maturity?

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