Now of course, Dow Jones is stuffed and mounted in Rupert Murdoch’s man cave. Perhaps he can pick up the Post at some point.
Even worse than raising dividends in a time of distress and disinvestment, the Post has binged on buying its own shares back from investors, spending $912 million since the program began six years ago and paying an average price of $424 a share. Those shares are worth $337 as I type, which means the Post has taken a $187 million bath on them—a 21 percent loss.
Particularly cringeworthy is the $198 million it spent buying its own shares from 2006 to 2008 at an average price of $661 each, or roughly double what they’re worth today.
As its share price has continued to fall, the Post has doubled down on its buybacks. In the last two years alone, the company has spent $653 million on share repurchases, buying in at an average $383 a share, 12 percent above their current price (a $79 million loss as of today).
This is financialization at work. Instead of investing in its business operations, the Post is investing in its stock, which is a very different thing. The only way this bet pans out is if the Post’s shares rebound significantly in coming years. Would you put money on that? I sure wouldn’t (moreover, the company effectively levered up to buy them. The Post rolled over $395 million in debt in early 2009 to mature in 2019—at a 1.75 percent premium to its old bonds).
Where would the Post be if its parent company had invested even one-quarter of that nearly one billion dollars in its newspaper, or in some other profit-making, preferably non-predatory venture? That’s unknowable, of course, but it’s worth thinking about when you ponder why newspapers haven’t better adapted to the digital age.
While the company has been throwing cash at shareholders, it has been gutting the Post’s legendary—and critically important—newsroom, which, after the current round of buyouts and/or layoffs, will be a bit more than half what it used to be. This latest round of buyouts could reduce the investigative staff from seven to four.
By handing all that cash back to shareholders while disinvesting in its newspaper, the company is effectively saying that spending money on the hallowed Post is like throwing it down the rathole—it sees no possibility of making a return on any net investment there. That may actually be true, but it’s bad for the country, and it’s not very Swashbuckling Capitalist of them. The Post won’t take risks betting its cash on its namesake news organization’s future. It will unload nearly a billion dollars into its own pitiful stock. The “disgorge the cash” philosophy, which masquerades as flinty shareholder capitalism, is actually insecurity and weakness—an inability or unwillingness to invest that buyback/dividend money to come up with new products or to shore up old ones.
The Post would like you to think that it’s doing more with less, but that’s hamsterized nonsense. Then-managing editor Raju Narisetti’s assertion last summer, under a grinning mugshot and speaker-circuitese that “news brands need to get creative and make their content easier, more engaging and useful,” that he had slashed the newsroom by 25 percent “without overtly impacting quality” was as bogus as it was offensive. Ask anybody who read the paper before and after.
Narisetti wrote that those cuts helped the paper save $9.1 million a year on payroll and $14 million a year overall. Fabulous! But in 2010 and 2011, the Post handed $405 million a year back to shareholders through share buybacks and dividends. The losses on its share buybacks in 2010 and 2011 could have funded the savings from newsroom cuts in those years—three times over.
It’s not Narisetti’s fault, of course, that the folks in the C-suite told him to slash newsroom costs while they spent squandered hundreds of millions elsewhere. But when senior editors argue that you can lose hundreds of journalists without impacting the quality of the product (“overtly,” anyway; whatever that means), they make those short-sighted moves much easier for bean counters to make—and they demoralize what remains of their staff.
It's quite simple: people don't like being tricked, lied to, and lulled to sleep while their free republic burns in the fires of tyranny and perpetual war.
All that tweaking of business models, etc., is futile if you refuse to treat your readers like adult-humans instead of cattle.
No clever business strategy will help a dying press outlet in the long run unless that press outlet begins acting like an honest business delivering a valuable product. Tell the whole story, no matter the political consequences. Stop "covering" the govt, its agents, and its corporate co-monopolists; expose them; give them NO benefit of doubt; make THEM prove THEIR case; keep THEM under the gun.
It is much harder to be a shill for the Warfare State in the Internet era. The NYT, WaPo, and the like should know this by now. The sheeple are waking up to ACTUAL history and current events, thanks to truly independent sources of information.
There is no way around it. When the SHTF, the angry masses know who enabled the evildoers. Get on the right side of history in these revolutionary times.
#1 Posted by Dan A., CJR on Fri 11 May 2012 at 08:30 AM
Bonehead,
Before you calculate the "bath" they took on the shares, you have to add back the dividend.
You seem to be upset that they won't waste money on journalists who are not adding value. Content wants to be free!
#2 Posted by Papa John, CJR on Fri 11 May 2012 at 11:15 AM
Papa Head,
The only value provided by a newspaper is its "content." That would be stories, photos, and commentaries, including blogs. The Post was a great paper when it challenged power and exposed wrongdoing. Remember the courageous decision to publish the Pentagon Papers? The great series exposing the terrible conditions at Walter Reed? The malfeasance of Jack Abramhoff? Who do you think produced that "content"? Do you think an unpaid "citizen blogger" is going to do that? Journalists are precisely why a business like the Post (or any newspaper) has value.
#3 Posted by Careful Reader, CJR on Fri 11 May 2012 at 11:41 AM
4/5 people never read newspapers 30 years ago. Most people read cheap entertainment weeklies, listen to radio, watched TV. Every paper in this country will have a paywall in 5 years, and again, only a small minority will read them. The NYT will have 100million reasons in 2012 to show you that content does not want to be free. Most likely, you wont agree...you're the other 4/5ths that never paid in the first place.
#4 Posted by Stephen, CJR on Fri 11 May 2012 at 12:17 PM
Equally weird is the way the Post is contributing to its own loss of readers by running long-long stories on subjects of limited interest and failing to expand its coverage of local news. A perfect way to drive short-attention-span readers to the internet. Self-defeating and suicidal are terms that come to mind.
#5 Posted by Sid Levy, CJR on Fri 11 May 2012 at 01:31 PM
What you have unwittingly written here is a treatise on the failures of human insight into human nature, Mr. Chittum.
“Much of that money is being squandered to appease the short-term interests and cash needs of shareholders, who very much include the Graham family, which controls the voting shares of the Post.”
This is classic Leftist idiocy. You believe that businesses exist to employ people…as their central function. Shareholders who bare the investment risk that makes the business possible, or founders who launched the enterprise out of thin air and grit, are secondary to the “worker bee drones” who think more highly of their OWN self-interested and fungible efforts, than they do of OTHERS’ far more successful self-interested efforts, which created their position in the first place.
Hence this brilliance: “…money is being squandered to appease” them.
This mindset is emblematic of the tone fomented in both private society and by our Gov’t “minders”…that contribution, and effort, and judgment, are characteristics evenly disbursed among us all. And that therefore, differences between us relate NOT to the aforementioned three factors, but to treachery, malfeasance, and privilege. This is quite literally a sickness, and sadly one which self-interested politicians prey upon in buttering their own bread, sowing the seeds of a permanently ‘beholden’ class of voters.
In the broader scheme, if Washington Post Co. fails, so be it. Of course it’s sad when people lose their jobs. But as Schumpeter knew, “creative destruction” is at the very heart of capitalism’s unprecedented ability to harness the unrelenting self interest of human beings to create and flourish. It is the human spirit equivalent of what makes saplings sprout anew just after a forest fire.
It is the childish refusal to acknowledge this self-interest and how it plays out, that is the uninterrupted failure of Leftists always and everywhere. You are willing to trade away your liberty and prospects for some cheap illusion of safety. This is why Communism and Socialism ultimately break down into a system of patronage and bureaucratic strangulation. Self interest is of course, always at the center…just unacknowledged by official rhetoric. The REASON capitalism it is as Jefferson said, “The best thing going,” is because it EMBRACES self-interest. It uses adult eyes to see human beings for what we are.
What ails the U.S. today is not a failure of capitalism, but of a failure to adhere to, and respect, both the tenets and limitations of capitalism. Capitalism is a steed with a simple course…straight ahead. This is why it works. But it needs an able but ‘subtle’ rider, as its natural limitation is that if left entirely to its own devices, it can be driven to excess. This is precisely why it goes hand in glove with democracy! Democracy is supposed to be that easy-on-the-reigns rider, who’s smallest nudging is needed to keep the horse from running straight off the track, and into the street.
But when, as is currently the case, democracy degrades into patronage and Gov’t largesse built around the illusion of good policy and lobbyist influence, and of overboard ‘good intentions’ gone awry…the system fails. As such, we are exponentially over-regulated, while at the same time incredibly under-enforced. A tragic and bitter irony.
Perhaps if lawmakers were termed law reviewers it would put them more of the mind that their job should be equally to create what is newly needed, while reviewing what is ineffective, redundant, and fails basic tests of Constitutional liberty.
Perhaps if businesses were allowed to fail under the weight of their ineptitude, and dismiss workers because of theirs, America could wake from her slumber. For now, faux righteous indignation is the bane of our Republic.
#6 Posted by Nom de Guerre, CJR on Fri 11 May 2012 at 01:41 PM
Let's not forget the unrelenting attacks on the right. It's every day, non-stop with no regard to the truth. The Post, long ago, discarded the interest of the readers. It's all about pushing its liberal ideology. What a great business plan. Catering to only 45% of the market. It is any surprise the paper is bleeding? Then again, most of us in D.C. don't care.
#7 Posted by Larry Grimes, CJR on Fri 11 May 2012 at 04:03 PM
I thought this was going to be a critical assault on the WaPo's lack of journalistic integrity in light of the awful, now debunked charges that Mitt Romney was a homophobic bully.
Then again, this is the CJR.
#8 Posted by Chris R, CJR on Fri 11 May 2012 at 05:21 PM
I can't say the comments represent conservative idiocy when several of them represent simple idiocy with fake conservative posturing slathered on like so much gravy. The Washington Post fails for content first; the reason the content fails is that so much of it is either establishment hackery for the center right to screaming hoodoo right or is utterly irrelevant and bland commentary on the nothing that is our national culture these days.
What other paper in the world would host the coordinated PR blather of Will and Krauthammer, which I suspect is simply emailed from some conservatroid think tank to their offices for their signatures and submission, based on the thematic and linguistic similarities between the two and a number of other conservatives. It's like someone paying the smart kid to write papers for the dumb jocks, just sign your names and misspell some words so no one suspects. The warmongering, panic mongering, drawing of false and harmful equivalences and patrician condescension make it painful to read, and the naivete and establishmentarian outlook of their bloggers doesn't help. No mercy for the mediocre.
#9 Posted by Premature Antifascist, CJR on Fri 11 May 2012 at 05:51 PM
I currently subscribe to the online version of the Wall Street Journal. At one time I considered subscribing to the Washington Post to get the liberal side of the news. Unfortunately, the Post has become so progressive that I will not spend any money to enrich the shareholders of this product.
#10 Posted by Reader Man, CJR on Fri 11 May 2012 at 06:23 PM
I think it's probably time for a charitable foundation to buy the WaPo and run it not-for-profit.
The Post's opinion page isn't that bad - one of the few papers to have moderately intelligent columnists from both sides of the political divide (apart from Thiessen, who's a torture-advocating idiot). Its national security coverage is also good, although increasingly the Times is getting the bigger scoops. The problem is everything else is just awful - I mean, the London Daily Mail's website covers US news better than the Post, and the Mail's UK print edition is pretty overtly racist. Their investigative reporting has gone rapidly downhill, making it just another city newspaper.
#11 Posted by JMS, CJR on Fri 11 May 2012 at 07:08 PM
The Post sealed its fate several years ago with a fateful comment by a top editor:
"We are inevitably the mouthpiece for whatever administration is in power. If the President stands up and says something, we report what the President said."
In other words, the principal daily in the nation's capital is a self-admitted conduit of government propaganda.
#12 Posted by Chucky, CJR on Fri 11 May 2012 at 08:25 PM
The problem is the disconnect in the advertising department within and without. I saw it. I've lived it and I have seen the newspaper business demolish themselves and it if it destroys, it will destroy us as a country. Journalists must learn where their paychecks come from and work on projects with the ad department (this does not include exposes, etc.) I even had a restaurant reviewer compare a local restaurant to remembering the Nazi's because they had a 1940's diner theme (said as much in the review). The travel department would withhold the weekly featured location in advance. Same for other feature departments and that's where the money is/was. There are plenty of stories.
#13 Posted by NewspaperSales, CJR on Fri 11 May 2012 at 08:39 PM
I was a loyal WP subscriber for 30 years. Read it every morning at breakfast and on the Metro. But the left wing bias went from being a lean to a tic to...relentless. I'm an independent, but I finally just stopped trusting the Post. I reluctantly canceled our subscription last month.
#14 Posted by Wally, CJR on Fri 11 May 2012 at 09:26 PM
This was a thought-provoking analysis, whether you agree or not, until you reach the last paragraph. Referring to the Mitt Romney may have bullied someone in high school story as "top-level journalism" removed any credibility you may have had. Yep, its right up there with Woodward/Bernstein.
#15 Posted by PeteG, CJR on Fri 11 May 2012 at 10:16 PM
All business this days seem to consider its stock price more important than its product, but as longtime subscriber and reader of the Post - altho I usually have to hold my nose while doing it - I think it's concerned more with circulation than investment, analogous to its editorial policy of favoring employment over investment. They seem to be afraid of becoming unpopular, or losing mkt share, and hope to keep up readership and ad revenue with fluff that gets more like tabloid-like everyday. Nothing new in that, tho. Started with TV, maybe radio. But, like funny money and make-work jobs it doesn't say really very much for a fundamental belief in its staff or public.
#16 Posted by REMant, CJR on Fri 11 May 2012 at 10:17 PM
I remain unconvinced that a pay wall or pay meter would help the Post out. The Post isn't The New York Times. While people may point to the success that the Times has had with its pay meter, it's important to remember that the two are not competitors or in the same class of news organizations.
The Post is not a national or international newspaper. If it were to try to be, perhaps it could justify a pay meter, but as a local metro daily, I'm not seeing it. The bigger problem is that the Post has a lot of good, free competitors.
For politics, there are a number of Web-focused and traditional outlets, and most would agree that those competitors are stronger than the Post for politics. For transportation and city coverage, there is Greater, Greater Washington. For local news, there is DCist.
There is also the Washingtonian for more feature-style writing. And local blogs do a great job of covering individual communities in the DC area. That's where I get my local news.
The only thing the Post really has overs it competitors is sports coverage. Would people pay for that? There doesn't appear to be evidence that people will pay for sports coverage.
The disinvestment is more troubling. The only way the Post or another newspaper is going to properly transition to the Internet Age is to invest in making products that appeal to people. Cutting newsrooms staff and not having an R&D house isn't going to help the Post get there.
If only news organizations approached these line times like economics. Rack up profits and cash in the good times, and spend it in the bad times to get through the lulls and to transition the business.
Dying industries can't cut their way to prosperity. It takes money, resources and time to pivot.
I do keep hope for the Post in the future. I hope they figure things out. We need the Post.
~Patrick
www.interchangeproject.org
#17 Posted by Patrick Thornton, CJR on Sat 12 May 2012 at 08:15 AM
Last year, I switched from getting the Post on my doorstep to reading it on my iPad. They keep saying they will charge for this service at some point, but never seem to get around to it. I would be happy to pay, but they don't ask.
I'm not sure I understand the Post's business model. Do they, y'know, have one?
#18 Posted by kindler, CJR on Sat 12 May 2012 at 05:40 PM
Just one problem, near the end of page 2. The NYT does not have a successful paywall in the technical sense. Anybody who uses NYClean or a Greasemonkey script knows that. People uninformed enough to pay for the NYT online, without knowing there are easy ways to defeat that paywall, are the only real reason that paywall is successful in a financial sense, if it is. Give it another 6-12 months, and let's see about it then.
Frankly, I think the NYT is afraid to put in a true paywall, afraid to see how much online readership it loses.
#19 Posted by SocraticGadfly, CJR on Tue 15 May 2012 at 07:01 PM
SocraticGadfly,
Check out Felix on this question
I look forward to revisiting this in 6-12 months.
#20 Posted by Dean Starkman, CJR on Wed 16 May 2012 at 01:58 PM
Hello, my name is Danny Weil and I am an investigative journalist and non-active attorney who has followed the malfeasance of the 'Compost' for some time. I concentrate on Kaplan Higher Ed and you can ead my articles at Truthout.com or simply google my name and you will see three years of articles on the commodity college Kaplan and WaPo's insider trading allegations, how they use stock, their family ties, their connections to the Koch brothers and their lobbying in North Carolina. You can read about their phony dental programs, radiology programs, and the rest of the 'university' tribulations.
It was my working with David Goodstein the whistleblower that exposed the fraud at the SurgTech program Kaplan ran that allowed David to settle his qui tam case, or False Claims case against Kaplan and the Post. He was one brave cookie.
As the blood bank for the Washington Post the most troubling is the alleged insider trading and you can find articles on this, as said, at Truthout and www.dailycensored.com.
The following article, published within the last few days at Truthout, was vaporized as were about 24 articles I have written about Kaplan, their stock and the Post.
I have no proof that the Post is engaged in cyberwar fare but do not doubt it. This is how they work, through intimidation and force. They always have.
Danny Weil
http://truth-out.org/news/item/9317-did-kaplan-lobby-to-deregulate-for-profit-colleges-while-one-of-its-schools-defrauded-students
#21 Posted by Danny Weil, CJR on Sat 2 Jun 2012 at 12:43 AM