WashPo: Pubs Lose Big, Kaplan Anchors Ops

by Erik Sass, Jul 31, 2009, 6:49 PM

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The latest quarterly revenue report from a major newspaper publisher turned out to be the best (or least worst) of the lot. On Friday, the Washington Post Co. reported that total revenue for its newspaper division declined just 14% from $197.3 million to $168.8 million in the second quarter of 2009 compared to the same period last year.

The decline was due mostly to a 20% drop in newspaper ad revenues at its flagship publication, from $100 million to $80 million. Of course, the fact that a 20% decline in ad revenues can be considered relatively tame bespeaks the dire situation of big newspaper publishers in general.

Like other big newspaper publishers, the Washington Post Co. has seen steep declines in all the major ad categories -- including classifieds, retail and national advertising -- although the company did not release specific revenue figures for these categories.

Again like its peers, The Washington Post is also experiencing declines in online revenues, which fell 9% from $25.9 million to $23.5 million. The decrease in overall revenues means that online revenues now make up a larger proportion of the whole -- 29.4% versus 25.9% last year.

Separately, the company's magazine publishing division saw total revenues decline 27% from $62.7 million to $45.5 million in the second quarter. The drop was due mostly to a 40% decline in ad revenue at Newsweek. The broadcast TV division also suffered, with revenue falling 20% from $82.8 million to $66.7 million, partly due to the lack of political advertising and big cutbacks in automotive ad spending.

Luckily for the Washington Post Co., these losses were more than offset by growth at its educational division -- including Kaplan, where total revenues increased 13% from $576.5 million to $649.3 million. The company's cable division also continued to do well in the second quarter, with total revenues growing 4%, from $178.9 million to $186.7 million. On the strength of these two divisions, overall company revenues for the second quarter were up 2% compared to 2008, from $1.106 billion to $1.128 billion.

The weak newspaper division results round out another terrible quarter for the newspaper business in general. In the second quarter of 2009, newspaper ad revenues fell 30.2% at the New York Times Co., 32% at Gannett, 30% at McClatchy, 24.3% at Lee Enterprises, 30.2% at A.H. Belo and 26% at Media General.

This is the 13th straight quarterly decline in newspaper ad revenue for A.H. Belo; the 12th straight quarterly decline for the Washington Post Co. and McClatchy; the 11th for Media General, the 10th for NYTCO and Gannett; and the seventh for Lee.

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