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Post Now an 'Education and Media' Company
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"I just think it's a recognition of what's already happened," Deutsche Bank analyst Paul Ginocchio said of the company's rebranding. Ginocchio has a buy rating on Post Co. stock and a target price of $910 per share -- more than $100 higher than yesterday's close.
"The company probably ought to be identified as an education company and get The Washington Post name out of the title," added newspaper industry analyst John Morton.
Indeed, the long-term purpose of the rebranding is clear: "It is likely that The Washington Post Co. of the future will be more an education company and a little less a media company every year," Graham said in his speech.
"It's factually true, so why not make the statement and move on?" Jonathan Grayer, the chairman and chief executive of Kaplan, said of the decision to rebrand.
"It has been amazing to me that, despite our size and our impact on the company, because of the fame of The Washington Post name and brand, the company is still described in the media as a newspaper publisher," he said.
Grayer, 42, came to Kaplan from Newsweek in 1990, became chief executive in 1994 and added the chairman's title in 2002.
Asked whether Kaplan would or could support The Post newspaper or Newsweek if the publications began to lose money, Grayer said: "The Washington Post Co. is a holding company, and in that role it decides how to use all the free cash flow its assets generate. That decision remains with the chairman and the board."
Graham said, "Kaplan is a great company on its own terms, but it does not answer to the business issues of The Post or Newsweek. They have serious issues to address and great people to address them."
Kaplan has grown near in size to its chief rivals in the education sector. The largest, Phoenix-based Apollo Group, has more than 250 campuses and learning centers across the country and reported $2.5 billion in revenue during the past fiscal year.
"This is a smart move by The Post, especially given the convergence in new media," said John G. Sperling, Apollo's executive chairman of the board. "The Washington Post Co. has discerned the profound link between publishing and education," a connection Sperling said Apollo also exploits.
Graham said that the company will continue to cut costs at The Post newspaper, but added that it may spend more than similar media companies to improve its news operations.
"I don't think we or anyone else have produced a kind of definitive 21st-century news site in the sense that Amazon has produced a pretty damned definitive book-buying site," Graham said. "But that's our aim."
