UBS Media Conference News

WaPo Chairman Wants 'Good Business Result' From Flagship

Graham Says Paper Can't Afford to Rely on Fortunes of Corporate Siblings

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NEW YORK ( -- The Washington Post Co.'s flagship newspaper can't rely indefinitely on the successes of its corporate siblings, Chairman-CEO Donald Graham told investors today.

Donald Graham
Donald Graham
It was a reasonable notion, perhaps, that the company would subsidize the paper, which started posting losses in the second quarter. The company's overall fortunes look healthy despite the recession, after all, largely because a poor job market will probably mean more customers for its academic test-preparation division. And the Washington Post Co. nurtured Kaplan, the test-prep unit, back when Kaplan was losing money.

Paper won't run on a loss
The newspaper business, on the other hand, just keeps looking worse -- as demonstrated as recently as today, when Sam Zell's attempt to rescue Tribune Co. arrived at a bankruptcy filing. Plenty of people now think newspapers should operate as not-for-profits if that would save their expensive form of journalism.

When an audience member asked Mr. Graham whether the company would be willing to just let its newspaper run at a loss, however, he said no. "We ran Kaplan at a loss for seven or eight years in the belief that we were headed for a great business," he said. That would apply for a promising newspaper, too; the Post itself was acquired at a bankruptcy auction in 1933 and eventually re-entered profitability.

New business model needed
But Mr. Graham said ongoing subsidies for the Post would be unacceptable. "No, the aim is to get to a good business result," he said.

The exchange came during the first day of the 36th annual UBS Global Media and Communications Conference. "The appetite for news right now is very high," Mr. Graham said at another point. "The business model that used to work at newspapers does not work any more."

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