There have been many speculations about why Warren Buffett — a long time shareholder, admirer, and one-time delivery boy of the Washington Post — opted not to purchase the company. Berkshire Hathaway has over $35 billion in cash and they’ve been purchasing local papers recently, so passing on the Post is curious at first glance.
Followers of Buffett have pointed to the fact that he has a policy of not buying into money-losing businesses in a shrinking industry.
But I think the real reason is that Buffett believes the Post will be better off in the hands of Bezos. For the Post to stop losing money, it needs some serious changes — changes that would be difficult for Berkshire to provide. The company would be only a tiny part of the massive conglomerate, and there wouldn’t be a figurehead leader to guide the paper during such a turnaround.
Buffett admires and respects Jeff Bezos.* He also loves the Washington Post enough to look past his own desires so it can have a brighter future. Don Graham no doubt sought Buffett’s advice before making this decision, and I’d like to believe this is what he told him.
* It’s also worth noting that the admiration is mutual. One of the major aspects of Buffett’s success is his ability to realize talent in others. It’s easy to see that talent in someone who knows strategy, history, product, and capital allocation so well.