Bezos says no to Ezra

artappraiser — Sat, 04 Jan 2014 20:18:58 +0000

In reply to Jeff Bezos Buys Washington Post—Not the Washington Post Company

Bezos says no to Ezra Klein:

Ezra Klein Is Said to Plan to Leave Washington Post
By Ravi Somaiya, New York Times, Jan. 2, 2014

[....] After consultation with the newspaper’s editor, Marty Baron, according to one of the people, he put forward a proposal with detailed revenue projections to build a new website dedicated to explanatory journalism on a wide range of topics beyond political policy. It would have been affiliated with The Post, the person said, but would have been a separate enterprise. The investment he sought, the person said, was in eight figures.

Ms. Weymouth and the paper’s owner, Jeff Bezos, declined to support the project. Since then, Mr. Klein has had discussions with several potential investors and venture capitalists in an effort to start the website himself, said those with knowledge of his plans, who insisted on anonymity in discussing them [....]

Interesting that the Post has

artappraiser — Wed, 07 Aug 2013 04:46:15 +0000

In reply to Jeff Bezos Buys Washington Post—Not the Washington Post Company

Interesting that the Post has a well-funded (over-funded?) pension plan:

Jeff Bezos gets a $50 million bonus for buying the Washington Post
By Theo Francis, Quartz, Aug.6, 2013

Amazon.com founder Jeff Bezos isn’t paying $250 million simply for the Washington Post, its website, and a handful of smaller publications. He’s also getting an unusual financial asset: an extra dollop of the Post’s flush pension plan.

Unusual for a old-line company, the Post’s pension plan isn’t just fully funded—it has $604 million to spare. That’s 41% more than what the company would need to pay every pension promise it has made to every employee and retiree until the day they and their spouses die. (The surplus, it turns out, is thanks to some good advice from Warren Buffett.)

That helps explain why Bezos is shouldering part of the Post pension plan, which isn’t typical in these kinds of transactions. The New York Times Company, for instance, just sold the Boston Globe to John Henry for $70 million, but he isn’t touching any of the Globe’s estimated pension shortfall of $110 million. Seen that way, the Times is ditching the Globe to recoup just part of what it owes the paper’s current and former employees.

By contrast, the letter agreement between Bezos and the Post gives him an extra $50 million from the company’s pension fund, above and beyond what his employees’ pensions will cost from here on out. He’ll also get any investment gains and losses on the assets between now and the sale’s close.

For Bezos, that extra money isn’t exactly free cash. He can’t simply spend it, and pulling it out of the pension plan to use for other purposes is difficult and potentially costly under US tax regulations. Those rules were put in place after Wall Street cooked up ways to strip pensions of extra cash during mergers and acquisitions in the 1980s.

Still, even locked up in the pension plan, the additional $50 million has its uses: It could beef up retirement benefits for his new employees or pay cost-of-living increases for future retirees, without adding to the new company’s cash costs. Under various circumstances, it could be used for severance payments or to fund some types of retirement savings plans. And it could also be used to help fund retiree health-care costs for Bezos’ new employees, since he’s also assuming responsibility for those benefits (but not those for already-retired workers) [....]

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Bezos says no to Ezra

Interesting that the Post has