@ UBS Media Week: Graham: Would Borrow For Great Asset But Wouldn’t Drown Company In Debt


Washington Post (NYSE: WPO) chairman and CEO Don Graham says the company will look at every opportunity “that walks in the door.” Keep the word “look” in mind when it comes to big spending, though, because Graham also made it clear to investors at the UBS Global Media and Communications Conference that he isn’t betting the ranch: “We would borrow to buy a great asset … Given the properties that we own, we wouldn’t drown them in debt. If you’re looking for people who did take advantage of leverage, I can recommend to you many great companies in other meeting rooms.”

And he isn’t interested in the non-profit route for the Washington Post either — not the official kind, like the Scott Trust that runs our parent Guardian, or the unofficial version where the paper is supported indefinitely by profit centers like Kaplan, Inc. and Cable One. During the Q&A, Graham was asked if he would be willing to run the paper at a loss. He reminded the audience that the company carried Kaplan at a loss in the belief that it break through. He would be willing to do that again. He also reminded the non-history buffs that the company as it exists today started with his grandfather Eugene Meyer’s acquisition of the Washington Post from bankruptcy in 1933 and his willingness to operate at a loss for 21 years. As for today’s version: “We’re running at close to a loss now but the aim is to get to a good business result and everyone at the Washington Post knows that.”

As for the idea being floated here and elsewhere that WaPo, The New York Times or others be turned into funded non-profits, when I asked him after the session if he would consider it, Graham said it wouldn’t be a sensible option for the Washington Post.

Business model: Graham sees opportunity for the company’s media outlets during this time of heightened interest in news but that doesn’t fix the business model. When it comes to WaPo and Newsweek, Graham is in the odd position of being “completely satisfied with management and completely dissatisfied with results.” He stressed, “the management of the Post Company remains strongly committed to the Washington Post and Newsweek.” It’s equally committed to running them as businesses but “the business model that used to work at newspapers doesn’t work anymore.” Finding ways to change the model is one of the reasons the company is bring on Vijay Ravindran … as chief digital officer in February.

Drop the print edition?: Asked if he would drop the print version of the Washington Post — one printing plant is already shutting down — Graham’s reply to any idea of a near-term action out of play, dismissing his abilities as a forecaster: “I don’t know what the hell will happen 20-30 years from now.” For now, the appetite for news — and for the printed version — is still there, to his thinking.

Tribune bankruptcy: The subject came up only obliquely during the session; in terms of the way the companies are run, all they have in common is the industry. But afterward, Graham talked about it a bit: “My overwhelming reaction is that I know Sam Zell and … he didn’t want this to work out that way.” He also offered another reminder about bankruptcy: “Companies can go through bankruptcy and come out of it stronger.”


Comments are closed.