Washington Post Sale Lets Company Focus on Education Challenges
By Edmund Lee & Sara Forden - Aug 5, 2013 8:13 PM PT
Washington Post Co. (WPO)’s sale of its flagship newspaper to billionaire Jeff Bezos rids the company of its weakest division, letting it focus on a once high-flying education business now beset by government scrutiny.
The Washington-based company draws about 55 percent of its $4 billion in annual revenue from education, including its Kaplan chain of for-profit colleges, whose sales tumbled 9 percent to $2.2 billion last year.
Like its competitors in the education industry, the business faces increased oversight into marketing, student-loan defaults and job-placement claims. Still, the challenges weren’t as daunting as those of the newspaper division, where revenue has shrunk for seven straight years. There wasn’t anything more the company could do to save the storied Washington Post from the print-media industry’s decline, Chairman Don Graham said.
“We’ve tried,” Graham said in an interview after announcing the sale of the newspaper yesterday. “We have innovated very successfully in terms of building audience, in terms of our reputation and in terms of our products, but not in terms of offsetting the decline in revenues.”
The sale to Bezos will add $250 million to the company’s coffers, and it spurred a share gain of as much as 5.5 percent to $600 in extended trading yesterday. Even so, management won’t have an easy task as they turn their attention back to education. Concern about escalating