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Journalism

Bezos Paid 17 Times Adjusted Profit for the Washington Post

Bloomberg reports today:

Jeff Bezos’s purchase of the Washington Post may look like a steal, yet it came at a rich valuation that newspapers such as the New York Times Co. (NYT) may only dream of obtaining.

The founder of Amazon.com Inc. (AMZN) plunked down $250 million for the Post newspaper division, about 17 times adjusted profit, according to data compiled by Bloomberg. That multiple implies a valuation for the New York Times of about $4 billion — more than double its current market value. Major metropolitan newspapers should fetch 3 or 4 times profit, said research firm Outsell Inc.

“Bezos paid a friendship premium of $200 million here,” Ken Doctor, a media analyst at Burlingame, California-based Outsell, said in a phone interview. “There are a handful of news brands in the world that will merit some kind of premium over the usual multiple, but the multiple over the multiple here seems really high.”

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