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Washington Post Hits the Skids

In these tumultuous times for newspapers, no one is immune. Even the Washington Post, one of the more stable and profitable papers in the country, is facing a number of hard choices financially.

In a 2,000-word letter to Washington Post Co.'s shareholders released yesterday, company chairman Don Graham disclosed that the news division - dominated by flagship Washington Post - lost nearly $25 million in 2008 and is expected to lose "substantially more" in 2009.

Responding to the gloomy outlook, the Post announced that it will be offering voluntary buyouts - its fourth since 2003 and the first since May 2008, when more than 100 staffers took the buyouts.

Graham conceded that beyond the immediate losses, he is still grasping for solutions to turn around a business that's seemingly on its deathbed:

So what's the future of the newspaper and news magazine businesses? I have no answer to this question. ... Today, it isn't obvious that even the best-run, most successful newspaper can be consistently profitable. But The Post will get every chance. ... We are willing to lose money ... if the losses are on a path to a healthy, profitable business.

Are we investing in The Post and Newsweek as a public service or because we feel their business models can be fixed? Emphatically the latter: it is universally understood that we must move toward profitability at The Post and Newsweek after what we hope will be a low point in 2009. But how we'll get there is not clear. We must cut costs; but we must (and will) continue producing excellent newspapers and magazines. Then, we have to continue to find new sources of revenue (at a time when some of our customers will be cutting back because of their own financial problems).

The Post Co., which also owns Newsweek, Slate, Kaplan education and Cable One, is trading at $380 a share, down from $800 at the end of 2007.

Beltway Marriage of Convenience

The Washington Post and Baltimore Sun have announced that on Jan. 1, 2009, the papers will share the majority of their content. The two papers were already part of the Los Angeles Times-Washington Post News Service, but previously they were prohibited from using each other's content. That restriction will be lifted by the new agreement.

Both papers insisted that this marriage of convenience will not result in newsroom cuts, but merely reassignments for reporters now doubled up on the same beats. The Sun will concede most of the coverage on the federal government, as well as the Navy football beat, to the Post, while the Post will be using the Sun's reports on northern Maryland counties and horse racing at Pimlico.

"I know journalists in both newsrooms may find this anathema," said Timothy A. Franklin, editor of the Sun, "but we're talking about daily, breaking, fairly routine stories so The Sun can use its resources developing original, unique content, which I think is a key part of our future success."

But one can't help but wonder if buyouts and layoffs would be imminent, particularly on the Sun's end. The paper is owned by the Tribune Company, which just filed for bankruptcy earlier this month and is looking to divest some of its assets, including the Chicago Cubs baseball team. Like just about every other paper in the United States, the Sun experienced a steep drop in readership in recent years. Its 2008 circulation is listed at 218,923, down 6 percent from 2007.

Washington Post: Fair and Balanced

Former Washington Post reporter Ronald Kessler thinks the paper has turned a corner - veering back toward the center.

After for years competing with the New York Times to see who could do a better job trashing the Bush Administration, the Post has decided to reacquire its journalistic objectivity, according to Kessler. The turning point apparently was the appointment of Marcus Brauchli, formerly of the Wall Street Journal, as executive editor in September.

Kessler observes:

No longer do I pick up the paper to find slanted stories that suppress or ignore the other side or that mischaracterize issues to further a liberal agenda. Instead, honesty has been restored to the coverage. It has become more probing and interesting as well.

Last week, the lead story on Page One was, "Charter Schools Make Gains on Tests." Prior to Brauchli's takeover, it would have been unthinkable for the paper to highlight that a pet Republican approach to education was successful. When conservative icon Paul Weyrich died last week, the Post ran the story under a three-column headline on Page One. In contrast, The New York Times ran a story on page B11.

The question is if this trend would hold, now with the Democrats sweeping back into Washington. Would the Post scrutinize every move by the incoming Obama Adminstration or could it be that its grand strategy is to make nice with whomever is in the White House?

I'm sure the Washington Times would be very interested to find out.