Innumeracy in The New York Times on Politico

Revenue is not profit, Ross Douthat

Ross Douthat has been writing a bit about how the Washington Post missed out on becoming Politico. Or owning Politico. Or something.

I say hat’s off to the WaPo for not becoming Politico.

But Douthat makes some whopper errors when he tries to get into the numbers:

We can’t know exactly how that counterfactual would have played out; maybe it would have ended unhappily for all concerned. Nor do we know the real state of Politico’s finances at the moment, so it’s hard to gauge how much of a difference-maker the kind of revenue it generates would have been. (If Politico is secretly bleeding money, then obviously my argument is flat wrong.)

But we do know that Politico made $20 million in 2009, before Politico Pro and its subscriptions even came online. The Washington Post, meanwhile, lost $53.7 million in 2012. Assume a slowly-expanding revenue stream for Politico over the last few years, in other words, and you can at least imagine a world where a Post that embraced Vandehei and Harris’s vision for how to cover politics — and monetize that coverage — was operating close to in the black today. And it’s hard for me to see how that scenario would be any worse for the rest of paper’s general-interest coverage than the Post’s current slide into the red, and very easy to see how it would have been a whole lot better.

No, we know that Politico did not make $20 million in 2009. It took in $18.6 million in revenue in its fiscal year 2009, according to SEC filings.

Costs come out of revenue, alas. For Politico, those came to $17.7 million that year. So it actually “made” only about $900,000 in 2009.

Thus Douthat’s entire paragraph, hedged even though it is, is wrong. Politico didn’t make anywhere near $54 million in 2012—in fact it was probably barely profitable, though it’s not clear if it makes money at all (its owner Allbritton hasn’t disclosed numbers in four years). I’d guess that it doesn’t bring anywhere close to $54 million in revenue.

So feel free to be thankful, as I am, that the Post didn’t “embrace Vandehei and Harris’s vision for how to cover politics.”

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,