WaPo Suffers Major Earnings Decrease as Newspaper Industry Struggles

MANDY NAGY MAY 5, 2013 6:15 PM

Politico reported Friday that the Washington Post suffered an 85% earnings drop in comparison with the company’s first quarter of last year.

The Washington Post Co. on Friday reported bad news for its newspaper division, with revenue totaling $127.3 million for the first quarter of this year — down four percent from 2012 — and an operating loss of $34.5 million.Overall, the company posted a profit of just $4.7 million, an 85 percent drop in earnings from the net income of $31 million for the first quarter of last year.In the newspaper division, daily and Sunday circulation at the Post dropped 7.2 and 7.7 percent, respectively, compared to 2012. Average daily circulation totaled 457,100 copies, with Sundays at 659,500. The report also noted that in January of this year, the Post increased the paper’s price for daily home delivery and daily and Sunday single copies. And print advertising revenue at the Post in the first quarter of 2013 dropped 8 percent to $48.6 million, down from $52.7 million in the first quarter of 2012.

The Washington Post isn’t alone.  The Newspaper Association of America recently released its American Newspaper Media Industry Revenue Profile 2012 report, which indicated that total revenue for U.S. newspapers declined by 2% in 2012.  And that’s a number that likely would have been worse without the publications’ efforts of online coverage and advertising.

It’s the picture of an industry that has continued to struggle, as was highlighted in last year’s list of the Top 10 Newspapers in Trouble at RealClear Politics.

Here are just a few highlights from publications grappling with similar issues in recent months:

• The NY Times recently reported a drop in its profits: “In the first quarter, net income was $3.1 million, or 2 cents a share, down from $42.1 million, or 28 cents a share, in the period a year earlier.”
• The Times Picayune announced last year that it would be changing its seven day a week print publication to a three day schedule, based in part on falling print advertising revenues.
• Newsweek also shuttered its print version this past December, opting for an all-digital format. According to CNN, “Newsweek’s print advertising has been in a steep, steady decline in recent years, plunging by $334 million, or 70%, between 2007 and 2011.”
• The Journal Register, parent to a host of local newspapers, filed for bankruptcy last year after struggling with its print-dependent advertising model: “from 2009 to 2011 Journal Register Company’s print advertising revenue declined 19% and print advertising represents more than half of the of the Company’s revenues.”

As Politico also reported, the Washington Post’s online revenue increased by 8% for the first quarter of 2013 in comparison with that period in 2012.  The information highlights the struggles of an industry that has been shifting much of its focus toward digital publishing and online advertising in an effort to fend off decreasing revenue numbers in its print publications.  Yet, the list of defunct newspapers in the US still continues to grow.

One thing that is not mentioned as often in the analysis of the state of the newspaper industry is the content itself. But it’s an issue that has certainly come up in coverage of potential buyers of publications.

Koch Industries has expressed interest in purchasing Tribune Company’s newspapers, which include the Chicago Tribune and the LA Times.  It’s a move that many on the left have very vocally decried and threatened would cause half the LA Times staff to quit.

The Newspaper Guild and Communication Workers of America even issued a press release on the matter, calling upon the Tribune to “make a pledge that they’ll only sell to a buyer that will protect the objectivity of the news product by making a public commitment to doing so.”

Considering the current state of “objectivity” of most newspapers today, many of which lean far more left than are willing to acknowledge, perhaps their print versus online business model isn’t the entirety of the problem.  Most consumers of news are looking for facts and are often alienated by news that comes pre-packaged from a particular slant. True objectivity might actually attract more readers from the largest base of the country.

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