## In Which We Watch Felix Salmon Vanish into the Weeds of the Economics of the Washington Post...

Felix Salmon:

Content economics, part 3: costs: The Washington Post… was sold for less than the value of its pension…. What Bezos paid for the Post was… negative $88 million. To be sure, Bezos is$250 million out of pocket: the $333 million in the pension fund is ring-fenced for the Post‘s pensioners. The first question is: How thoroughly is the pension money ring-fenced? Could Jeff Bezos take the pension fund and invest it in… junior debentures of the Washington Post for example? Will he? Bezos will personally own 100% of the stock of the Washington Post. But is there anything preventing him from making any cash he commits to the Post senior debt, and thus have an$333 million mezzanine cushion that must be burned through as a firewall in any liquidation before he is out more than his initial $250 million in cash? Felix goes on: Editorial costs rise… [with scale] even in terms of editorial costs per pageview. The lowest costs come… [from] individual bloggers…. The highest costs… come at the large outfits…. ProPublica… spends… half a million dollars per working reporter per year, in a place where stars like Jesse Eisinger make more than$200,000 just in salary….

In her open letter to Jeff Bezos, Kara Swisher applauds the fact that the Post‘s new owner has:

the gazillions of dollars needed to pull the Post through to the other side and allow it to maintain its top-notch standards in a world still unwilling to pay for some of those standards and the fine journalism that results.

The alternative can be seen at Forbes, where Lewis Dvorkin… [uses] a small number of editors to oversee a network of 1,100 contributors, only 25 of whom (2.3%) made more than $35,000, and only two of whom (0.2%) made more than$100,000. That model, he said, needs to “evolve…. Translation: We were paying very little before, and we’ll be paying even less going forwards.

My view? It's gotta be cheaper and more effective in the long run to take a subject-matter expert on the ground already on location, pick up their take, and lightly edit it than it will be to pay full-time reporters without subject-matter expertise to find the experts, interview them, and then present it as the View From Nowhere. In a generation, I suspect, there won't be very many reporters, and there will be very very very few well-paid reporters. There will be aggregator/editors, and there will be subject-matter experts who make some of their incomes--or some of their reputations--by writing up what they see.