In a letter to shareholders yesterday, Washington Post Co. Chairman Donald E. Graham revealed that the loss of "substantial money" in 2009 will involve further cost cutting measures at the Washington Post, the paper reported today. This comes on top of a US$24.9 million operating loss for 2008. However, the company is not prepared to write the newspaper off just yet.

"The familiar problems of the newspaper industry - declining readership and the loss of classified - are now made worse by bankrupt advertisers," Graham stated in the letter. "The newspaper will lose substantial money in 2009. Some will be non-cash accelerated depreciation because we will be closing a printing plant. Most will be real losses."

The Post Co. is prepared to take losses at its two major titles, The Post and Newsweek "as we did at Kaplan from 1994 to 2001," Graham stated. At present, 70 percent of the company's revenue comes from higher education subsidiary Kaplan and cable network Cable One. This is a dramatic shift from 1998 figures in which The Post and Newsweek earned 75 percent of the company's income, The Post reported.

"The Post will get every chance" to become profitable again, Graham wrote. "Ten years from now, it is highly likely that customers will be getting news from profitable institutions staffed by talented reporters and editors," Graham writes, according to The Post. "We're going to try to show a way."

However the publications must reveal a novel business model capable of profitability in the industry's contemporary environment. "Post management knows that losses must diminish in 2010," advised the letter.

Newspaper analyst John Morton told The Post he thinks Graham's letter makes it clear that "the principal owners are committed to staying in the business even if it's not consistently profitable."