Chairman Sees Substantial Losses at Post in 2009
The Washington Post will follow a money-losing 2008 by losing "substantial money" in 2009 and will continue to cut costs, Post Co. Chairman Donald E. Graham said in a letter to shareholders atop the company's annual report released today.
The Post Co. newspaper division -- which is dominated by the flagship paper but also includes the Everett (Wash.) Herald, Express and a number of smaller papers -- reported a $24.9 million operating loss last year, excluding impairment charges.
As a whole, The Post Co. -- which also owns the Kaplan education company, Cable One cable company, six television stations, Newsweek, Slate and a number of other publications -- saw its 2008 revenue rise compared with 2007 but earnings drop, thanks to impairment charges related to the declining value of some assets and one-time charges.
"The familiar problems of the newspaper industry -- declining readership and the loss of classified -- are now made worse by bankrupt advertisers," Graham writes. "The newspaper will lose substantial money in 2009. Some will be non-cash accelerated depreciation because we will be closing a printing plant. Most will be real losses. Post management knows that losses must diminish in 2010."
Newsweek "has a plan it hopes will change the direction of the business and put the magazine on a better and more profitable course," Graham writes.
Graham said that The Post Co. is willing to lose money on The Post and Newsweek "as we did at Kaplan from 1994 to 2001" if the two publications show that they have a plan to profitability. Despite the grim news, Graham is hopeful for the future of news as a business.
"Ten years from now, it is highly likely that customers will be getting news from profitable institutions staffed by talented reporters and editors," Graham writes. "We're going to try to show a way."
He writes that "The Post will get every chance" to become profitable again.
Kaplan and Cable One combine to provide almost 70 percent of current Post Co. revenue. In 1998, Graham writes, The Post, Newsweek and the television stations provided 75 percent of company revenue.
March 25, 2009; 1:30 PM ET
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