Politico Crushing It On Revs, Profits In Fiscal ’09; Changes Ownership Structure

Politico Cover

The juggernaut called Politico keeps on rolling, nevermind the recession, thank you. And some changes in company structure may hint at what could come next for it. The site and print paper, started in January 2007 by Allbritton Communications (ACC), has in two years grown to be a $20 million operation, according to paidContent figures, and finish calendar 2009 with operating profits of about a million or more. Even though Allbritton is a family-owned company and private, its debt structure and large number of shareholders means it has to file quarterly and annually with SEC, but this is the first — and last — time (reason explained below) it has broken out Politico numbers separately. The complete numbers below on its revenues and operating profits/losses from the late 2009 10-K SEC filing by Allbritton (with lots of extra calculations to deduce other numbers):

So if you were to map out revenues for full calendar year 2009, it will cross $20 million, which makes it higher than the estimated/reported HuffingtonPost revenues for 2009 of $15-17 million plus. And they owe a lot to its print edition for that — as the numbers below in the chart show that well over a majority comes from it — as well as the turbulent and eventful political year where health care and other issues dominated, and hence increased issue-oriented advertising demand. The dip in Politico’s operating profit in its fiscal Q409 is explained by lack of political advertising in the quarter, compared to the prior year when Presidential elections were on.

Also, Allbritton has interestingly changed the ownership structure of Politico: on Nov 13 last year, it distributed the equity interests of Politico to the family-owned holding company called “Perpetual”, according to the filing, though no specific reason is given. Which means that from that date, Politico’s earnings numbers will not be reported in Allbritton’s filings.This isn’t the first time ACC has done it in 2009: earlier in the year it did the same thing with its Charleston, South Carolina local TV station WCIV, where it distributed the equity interests of WCIV to Perpetual.

Some of the possible reasons could include:
— change for tax purposes
— could possibly mean Allbritton family is looking to bring outside investors into Politico, or maybe even a planned public listing of it.
— or, could also mean that since ACC is starting a DC-area online local news venture, headed by Jim Brady, and has said it would merge ops of two of the local TV station websites — WJLA.com and News8.net — with it, that could leave Politico orphaned as a reporting unit. It may make more sense, again possibly for the two reasons above, keeping it out of ACC structure.


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