The Washington Post's Financials Suggest Bezos May Have Got A Huge Bargain

BezosThe VergeAmazon’s Jeff Bezos

Amazon CEO
Jeff Bezos has yet to describe his plan for the Washington Post, which he just bought for $US250 million. Even though the newspaper itself is part of an industry that’s in free fall, the finances of the Washington Post as a standalone paper actually have some bright spots.

He may have gotten a bargain.

Here’s what Bezos is getting for his $US250 million, based on the company’s 2012 annual report.

First, the bad news.

Revenues are going down:

  • Overall revenues at the Post declined 7% to $US581.7 million in 2012.
  • The paper lost $US54 million in 2012, an increase loss from 2011 when it lost $US21 million.

Print ad revenue particularly is in decline:

  • – 14% in 2012
  • – 11% in 2011
  • – 6% in 2010

And circulation is in decline:

  • – 2% in 2012

Print ad revenue is a particular problem:

  • Print ad revenue declined 14% to $US228.2 million in 2012

But the online section of the Post is pretty healthy:

  • Online revenue ( and Slate, mostly) increased 5% to $US110.6 million
  • Display online advertising revenue increased 6% in 2012,
  • Online classified advertising revenue decreased 1% in 2012.

Bezos is not taking, just the newspaper and its web sites. But still, he’s paying $US250 million for a business that has $US581.7 million in annual revenues, about one-fifth of which is a $US100 million-internet business which is growing.

It won’t take too much more growth — or too many cuts — to make the Post profitable.

He’s paying a roughly 2X revenue multiple on the whole and a .5X revenue multiple on the web business.

If those numbers were coming out of a tech startup — where valuation multiples can go as high as 6X revenues — Bezos would have gotten a huge bargain.

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

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