The Washington Post Company announced the completion of the divestiture of its daily and Sunday newspaper, The Herald, based in Everett, WA, La Raza, to Black Press Ltd. and its subsidiary Sound Publishing.
Bleak economic conditions, along with waning advertising demand, have been weighing upon this Zacks Rank #3 (Hold) stock’s performance, and compelled it to take the tough decision of offloading the newspaper, along with its print and online products, which it has owned since 1978.
The Washington Post Company’s newspaper division has been struggling for quite sometime with revenues declining 7% to $581.7 million in 2012. Moreover, operating loss widened significantly to $53.7 million in 2012 compared with $21.2 million in 2011.
Earlier, the company had revealed its intention of shedding 2 shipping terminals in Alexandria and was seeking buyers to sell its headquarters housed in Northwest Washington. These initiatives are significant of The Washington Post Company’s efforts to shield itself from the impact of an unstable market.
Other than The Washington Post, there are other publishing companies which are shedding assets. The New York Times Company (NYT - Analyst Report) completed the sale of About Group, which it acquired in 2005, to InterActiveCorp (IACI - Snapshot Report) for a consideration of $300 million, divested its remaining stake (210 Class B units) in the Fenway Sports Group and sold Regional Media Group.
Moreover, the company intends to sell its New England Media Group, including The Boston Globe and its allied properties.
The publishing industry as a whole has been struggling with sinking advertising revenues and declining circulation as more and more readers are gradually choosing free online news, thereby making the print-advertising model increasingly irrelevant. To curb shrinking advertising revenues and seek new revenue generating avenues, the publishing companies are contemplating charging readers for online content.
Companies like News Corporation (NWSA - Analyst Report) have taken a leap toward an online subscription-based model for general news content. The New York Times Company is another such company which initiated a pricing system for its NYTimes.com.
Publishing companies are gradually adapting themselves to the changing scenario and transforming their business models in order to better position themselves in a multi-platform media universe.