Crain Communications of Chicago will not exercise its option to purchase 50 percent of the Washington Journalism Review, a monthly magazine that covers the news people and organizations that cover Washington, the president of Crain said yesterday.

Crain, which owns about 25 publications, including Advertising Age and business weeklies in New York and Chicago, agreed two years ago to act as a consultant to WJR for marketing and advertising in return for an option to purchase half the magazine.

WJR, founded in 1977, never has made money, and presently is losing between $50,000 and $100,000 a year, according to its publisher, Jessica Catto.

Asked about the future of WJR, Catto said, "We're all very optimistic and . . . we're going to keep on. . . . For this kind of magazine, it takes time to build credibility. Advertisers don't just beat a path to your door. It's a slow process."

Rance Crain, president and editorial director of the company, said yesterday that his firm had "too many fish to fry" to continue its relationship with WJR. Crain has started publications in New York and Detroit and has stopped publishing Crain's Illinois Business because it failed to attract enough advertising support.

"We knew if we exercised our option, we weren't going to have time to give it the attention it deserved," Crain said. He called WJR's financial situation "manageable" and said that was not the reason his company decided against the partnership.

"They've been quite busy doing other things," Catto said of Crain's decision. She said the magazine is not actively looking for another partner, although it is "a possibility."

"A lot of people have called and shown interest," she said. "But I kind of like it the way it is. Unless Prince Charming came along, we probably wouldn't" enter into a partnership.

Catto said she did not expect any cutbacks in the magazine's editorial staff of seven full-time employes because of the news from Crain.

WJR has a circulation of 35,000. Two years ago, the magazine established the "Oscars" of journalism, in which it polls readers annually for its "best in the business" awards.

Catto is the daughter of William P. and Olveta Culp Hobby, former publishers of The Houston Post.

WJR is published by Washington Journalism Corp., a wholly owned subsidiary of H&C Communications Inc., a privately held Houston company that owns five television stations and one radio station.