Is the Washington Post Sinking its Own Ship?

When S&P downgraded the Washington Post Co.'s credit rating late in June, the ratings agency said it expected the company's total EBITDA to sink by 30% in 2009. Well, the company's Q-2 earnings report is out today, and there's a lot of red ink, especially at the Pulitzer-Prize winning newspaper and at Newsweek magazine.

But the company's overall financial health is boosted by its profitable Kaplan's educational operations plus a regional cable TV division, so it reported a profitable result overall, which cheered Wall Street (see chart).

For a more-detailed perspective on the company's numbers, please read Editor & Publisher's authoritative blog on the newspaper industry, Fitz & Jen, which today concludes, "...it's clear that the proud flagship newspaper isn't just being outshined by the Kaplan education business -- it's become a drag on the company itself. (Italics added.)

Think about that for a moment. The publication that the company is named after is suffering as much as any other daily metro in the country, yet its corporate owner can sustain deep losses in ad revenue at the Post and Newsweek due to its diversification into other lines of business.

Perhaps, in the not-too-distant future, we'll see a rebranding at the corporate level, and a new name,  Kaplan's, with the Washington Post reduced to a sub-brand and consigned to a relatively minor division within. After all, with the Post losing around $90 million a quarter (!), if it were a stand-alone business, it probably would be rated as junk and trading with the penny stocks.

Recent coverage of the Washington Post Co. here at Bnet Media:

May 17 Newsweek's Redesign: Nice Try
"With so many voices loudly urging magazine execs to start re-imagining their products before it is too late, they must feel besieged -- sort of like a person going through one of those mid-life crises where everybody seems to have an opinion about what you should do--except you..."

May 11 Washington Post's Kurtz Loses Hope for Newspapers
"As he noted in his popular media column in today's Washington Post, Howard Kurtz has long been one of the newspaper industry's 'most fervent optimists'..."

May 4 WashPost Ad Revenue Plummets by One-Third in Q-1
"Of all the major newspapers on various "endangered" lists these days, one that rarely gets mentioned is the Washington Post. Unlike many of its competitors, whose stocks trade for pennies or a few dollars, the Post has been soaring up there in Google-like territory..."