What’s Left at The Washington Post Company After Bezos’ Buy?

by James Brumley | August 6, 2013 3:15 pm

What’s Left at The Washington Post Company After Bezos’ Buy?

Less than one day after Amazon.com (AMZN[1]) CEO Jeff Bezos announced his intent to acquire the Washington Post — the newspaper, not the entire Washington Post Company (WPO[2]) — the question “why?” is being spouted out at a brisk pace.

It’s a tough question to answer, even with a hypothetical response. After all, Bezos’ experience is solely in Internet commerce. Why would he want to get into the print-media business, which most everyone knows is on its deathbed?

But it’s not the only question worth asking. The handful of folks sitting on the other side of the table might be wondering what’s the upside of owning the media company now that its flagship property — not to mention its namesake newspaper — are no longer part of the organization.

And that might be the most misunderstood aspect of The Washington Post Company — the D.C.-based newspaper isn’t even close to being the company’s only property. In fact, the company’s newspapers are but a small part of the organization. The corporation also operates a small number of websites, a telco outfit called CableOne, and the Kaplan family of school, testing and tutoring services. Indeed, the newspaper is/was merely a part of The Washington Post Company’s revenue mix; all those other divisions are still under the company’s care.

Given that, there are several upsides and downsides for WPO shareholders in the wake of Bezos’ buy.

Pros

Cons

Bottom Line

As for whether The Washington Post Company is better off without its namesake newspaper, the answer is yes, WaPo will be a better company without its print business. There was little chance of salvaging it back into a profitable venture again.

While the future of the company is still fuzzy, without the newspaper, the future is actually a little clearer. And it’s not bad looking.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

Endnotes:
  1. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  2. WPO: http://studio-5.financialcontent.com/investplace/quote?Symbol=WPO
  3. only needs $1.47 billion: http://blogs.wsj.com/corporate-intelligence/2013/08/05/washington-post-co-s-real-star-asset-a-massive-pension-fund/

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