Washington Post Co.’s future relies on Kaplan's for-profit business

By IVCPOST Staff Reporter

Aug 07, 2013 01:46 PM EDT

On the night of August 5, Kaplan Inc.'s chief executive officer, Andrew Rosen, sent a memo to the company's workers regarding its parent corporation's, Washington Post Co., plan to sell its newspaper. Washington Post Co. currently plans to alter its name after the sale of the newspaper to Jeff Bezos, Amazon.com Inc's CEO.

"The world will soon realize that Kaplan, which owns a chain of for-profit colleges, is crucial to the rest of the company's prospects," Rosen said. "For some years now, Kaplan has been the largest part of the Washington Post Co., and the most important determinant of its economic future that wasn't always fully understood by the broader market. It will be now."

Kaplan's role posed struggles for Washington Post Co. since the for-profit colleges suffered from a plunge in enrollment and rivalry from other colleges. Kaplan Higher Ed and Kaplan University's combined enrollment slumped to 62,192 student from 112,221 in 2011.

However, last year, Washington Post Co. generated more than half of its US$4 billion in yearly revenue from the company's education enterprise. Many years ago, Kaplan's for-profit  colleges' income and earnings growth aided in offsetting the declines at its newspaper.  Kaplan posted a US$105.4 million operating loss for last year due to reorganization costs and noncash fees related to the business' diminished value.

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