Home / Newsletter / Newsletter n.260 - 7 agosto 2013 / Why Jeff Bezos Got a Better Deal on The Washington Post Than You Think

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07/08/2013
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Why Jeff Bezos Got a Better Deal on The Washington Post Than You Think

07/08/2013

With his $25.2 billion fortune, Jeff Bezos has enough wealth to backstop losses at The Washington Post for more or less as long as he likes. This, of course, is one of the advantages of going into the media business when you're one of the world's 20 richest humans -- the potential downside barely even registers as a rounding error in your personal finances.

The interesting thing, though, is that that the Amazon founder might not actually have to do much backstopping. For all that's been made of the financial troubles at the Post, the newspaper business Bezos just snapped up for a measly (by his standards) $250 million might actually be closer to profitability than many realize.

For each of the last several years, the Washington Post Company's newspaper division, which included several local dailies and online publications like Slate along with the Post itself, has indeed lost millions. In 2012 alone, the division bled $53.7 million, up from $21.2 million in 2011. But much of those "losses" didn't have much to do with the everyday functioning of the publication. Rather, they were due to the arcane (but important) rules of pension accounting (yes, that's right, there are still a few companies outside the auto industry that provide old-school, defined-benefit pensions). Even though the company's retiree obligations are in fact way overfunded, for various reasons the newspaper division still got dinged with more than $110 million worth of expenses related to them over the past three fiscal years.*

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