The Washington Post – Sale of a Family Business Newspaper

The recent announcement that the Washington Post newspaper was being sold to Jeff Bezos from Amazon.com, brought back memories of a speaker presentation that Alan Spoon, former president of The Washington Post gave at one of our Center’s meetings. Several years ago we had the opportunity to have Alan Spoon, meet with our Center members at the Northeastern University Center for Family Business, where he discussed the close working relationship he had with the Graham family. Some of the issues he discussed included; non-family executives, educating investors, creation of value and the benefits of longer term vision vs. short-term profits.

Following is a summary of Alan Spoon’s remarks when he was president of the Washington Post.

The Story of The Washington Post: Perspectives from the President

For ten years, Alan Spoon was President of The Washington Post, serving with the famed mother-son team of Katherine and Donald Graham. At this breakfast meeting, Center members learned how Alan managed his role as a non-family member leader of this exceedingly high profile family owned and managed enterprise.

After watching a short video of Katherine and Don Graham discussing the benefits of a family controlled business, Alan Spoon shared some of his personal observations and experiences of working with the Grahams as a non-family member professional manager.

Alan began with a brief history of The Washington Post, describing the growth of the company beyond the core newspaper business into other media such as television, cable, magazines and its highly successful Kaplan education division. The company went public in 1971. Joining the company in 1991, Alan managed a diversified business and together with Katherine and Don Graham they experienced strong growth across five platforms.

At this meeting, rated by Center members as “extremely valuable,” Alan described the benefits of a family controlled business. He mentioned how family ownership can be liberating to professional management when family control affords a more patient outlook toward growth by looking at a longer-term perspective. The principals were willing to grow their franchises over time. This longer-term vision proved to be very strategic and was a competitive advantage compared to large public non-family owned and managed businesses that tend to manage for shorter term profits.

Spoon discussed the importance of educating investors and analysts about the advantages to a slower more methodical growth. He told investors that the principals would be fully accountable for the long run with creation of value, but they were not going to run the business quarter-to-quarter.

Discussing the importance of respect between the family and professional managers, Alan noted that there were very few Graham family members at the Post. Family members were welcomed, but only in a professional capacity. Saying, “You can’t fake it”, he claimed the family leadership wouldn’t have worked if Katherine and Donald didn’t have strong abilities and talent as well as strong respect for each other. “If the company is being run as a lifestyle or as a source of dividends it won’t work.”

Spoon also mentioned how it important it was for the company’s Board of Directors to understand the family dynamics. He told Center for Family Business members how the Grahams understood the importance of a quality compensation plan for professional management. Their compensation packages were not only market competitive, but also included long-term incentives to reflect the long-term strategic visions for the business.

“One of the challenges for professional management, Alan said, “was the speed of decision making. Decision-making at The Post tended to be slower, more careful, considerate and reflective.”

While not privy to all the intimacies and informal conversations between family members, such as at Sunday dinners, Alan said it was important to keep the professional manager in the loop on relevant family issues as Katherine Graham successfully did so with him.