Wednesday, August 7, 2013

Nieman Journalism Lab reporting:
Why sell? Why now?
There are two fairly simple answers.
For the Post, quite specifically, its Kaplan genie ran out of Post subsidy wishes. As other newspaper companies turned south, with the one-two punches of digital ad and reader disruption and then the Great Recession, Kaplan — the Post Company’s separate education business — offset lost Post profits. Then, with government pressure on the excesses of the digital education business, Kaplan lost its mojo, its revenues and, in 2012, its profits.

For Post execs, it was time to face the financial music. The tune they heard was off-key. It’s a reckoning I now hear widely across the newspaper industry, from the U.S. to middle Europe: the next five years may be as tough a digital transformation as the last. Yes, the positive of digital/All Access reader (circulation) revenue is great, a ray of hope. Marketing services and events businesses are offering new revenue streams unthought of three years ago. Yet, the accelerating print ad decline, coupled with tepid (if any) digital ad revenue growth, casts a dark cloud over the next several years.
The meager profits (5-10% in many cases) of daily newspaper companies are fading from solid black to gray, in danger of turning red, or in the case of the Washington Post publishing division, staying in the red....
...So this new private ownership takes newspaper companies out of the glare of public company profit pressure and scrutiny. The Globe and the Post will be just the latest to move from publicly traded companies into private hands, following the Orange County Register, the Philadelphia Inquirer, Journal Register Co, and MediaNews Co, among others...

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