Amazon.com CEO Jeff Bezos is buying the Washington Post newspaper for $250 million. Warren Buffett has described Jeff Bezos as being “the ablest CEO in America.”
The Washington Post Company derived 14% of its revenues in 2012 from newspaper publishing. The parent company reported a net operating loss of $53.7 million in its newspaper division in 2012, while the corporation posted net income of $131 million. In 2012, the Washington Post Company derived 55% of its revenues from education, 20% from cable television, and 10% from television broadcasting.
Berkshire Hathaway is the largest outside shareholder of the Washington Post Company with a stake valued at approximately $1 billion (1.7 million shares) representing 24% of the class B (publicly traded) shares. Warren Buffett had been a director of the Washington Post Company for many years until 2011, and maintains a close personal and professional relationship with Donald Graham, the CEO of the Washington Post Company.
The Washington Post Company will be changing its name in the near future and may use the $250 million it receives from the sale of the newspaper business to accelerate its stock repurchase program or make additional acquisitions. The company repurchased 4% of its shares during the first half of 2013.