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THE WASHINGTON POST COMPANY
6
In response, we have consolidated manage-
ment of our online and campus businesses under
Andy Rosen, Kaplan’s president. (We expect
Kaplan Higher Education, reporting to Andy, will
be about as big in revenues as The Washington
Post newspaper in 2006.) Andy’s one of our com-
pany’s best managers. Already we can say pretty
confidently that our higher education business will
resume growing — slowly — this year.
Highlighting the mistakes in one Kaplan division
can give you the wrong impression. Our education
business is a rare combination — a good business
and an outstanding management, both at opera-
tions and expansion. Some acquisitions in 2005
won’t pay off for years. (We acquired the profes-
sional-education assets of BISYS Corp., fully
expecting they would make no contribution to 2005
profits. As it happened, they made some money.
But their potential contribution in future years is sig-
nificant.) Managing such a rapidly growing busi-
ness — Kaplan revenue grew 24% in 2005 — is a
big challenge, bigger as the business grows.
When any of our businesses makes an impor-
tant misstep, we’ll tell you about it. At Kaplan, the
home runs have far exceeded the errors. And the
game is still in its early innings.
▼▼▼
Imentioned that Kaplan had become our high-
est profit division in 2005. The previous champ in
that department, Post –Newsweek Stations, had a
fine year in almost all aspects last year (and just
may nose out Kaplan for the highest operating
income in 2006 — with help from the Olympics
and elections for governor and senator in all three
states we operate in).
Local television stations, like local newspapers,
used to be a simpler business. TV advertising still
works fantastically well, but with so many new
media for advertisers to explore, it’s harder for
local TV to maintain its traditional share.
The best answer for a local station is to be num-
ber one in its market — number one in local news,
for sure — to be the station advertisers have to buy.
Post–Newsweek Stations resumed its traditional place: number one in
profit margins among group broadcasters.