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, at $350/share and a $3.25 market cap (~ four times that of The New York Times).
But the daily newspaper in our nation's capital is hardly immune to the disaster sweeping its industry; it's just that its parent company does a lot more than simply publish an influential newspaper. For its first quarter financial results, just filed today with the SEC, the company reveals that revenues from the newspaper division have fallen to the point they make up only around 16 percent of the company's total revenue -- as opposed to around 20 percent just a year earlier.
The newspaper's numbers are bad, very bad. It lost 33 percent of its advertising revenue from what it received in Q-1 last year, although its circulation remained relatively stable. In dollar terms, the newspaper ad revenues were off by $35.2 million, which single-handedly sent the giant company into the red, with a $19.5 million operating loss.
Think about it. Without its flagship paper, The Washington Post Company would have posted a $15.7 million operating profit. You better believe the execs inside the corporation's now much larger divisions (cable TV and Kaplan's education) have taken notice.
Then, almost as an afterthought, there's the magazine publishing division. Here's what the company's 8-K reports: "Revenue for the magazine publishing division totaled $46.1 million for the first quarter of 2009, a 14 percent decrease from $53.4 million for the first quarter of 2008. The decline is due to a 23 percent reduction in advertising revenue at Newsweek due primarily to fewer ad pages at the domestic and international editions. In February 2009, Newsweek announced a circulation rate base reduction at its domestic edition, from 2.6 million to 1.5 million, by January 2010."