All the News That’s Fit to Fold: the New York Times Runs Into Trouble
The New York Times newspaper, figurehead of decent journalism globally and all around nice institution, looks like it’s suffering some serious pain at the moment. The company has just released third quarter profits, which are BAD (from Reuters):
The company, which reported a 16 percent drop in advertising revenue at its news media group, also said it may write down the value of its New England operations by up to $150 million, underscoring the dismal state of newspaper advertising. Shares fell 2.5 percent at mid-day.
“We plan to continue to explore opportunities to reduce our debt levels,” Chief Executive Janet Robinson said in a statement.
And that would mean…?
“Analysts have mentioned the [Boston] Globe as one property that the Times might sell, and in the past few years, former General Electric Chairman and Chief Executive Jack Welch considered buying it.”
Over at AlleyInsider though they’re talking about this being a serious make or break moment for the NY Times, because not only are its revenues falling, but it has a large ammount of debt and a small amount of cash in a period where that’s not a great place to be (speak to Iceland/Hungary/Pakistan/Argentia/South Korea about that one):
“The company has only $46 million of cash. It appears to be burning more than it is taking in–and plugging the hole with debt. Specifically, it is funding operations by rolling over short-term loans–the kind that banks worldwide are cancelling or making prohibitively expensive to save their own skins”
Over at the Murdoch-owned Wall St Journal affiliate blog MarketWatch, the mood was more gloating:
“How long will it be until the vulture mergers-and-acquisitions pros start to smell a takeover of the Times at these levels? The Times’ stock price may sink further, only making the company seem more appealing to a bargain hunter who sees value in arguably the most prestigious brand name in the media world. Of course, the controlling Sulzberger family must agree to an acquisition.
The Times had better get its act together, or its business writers will end up writing stories about those vultures circling the newspaper’s sparkling new headquarters.”
It’s completely unlikely that the NY Times brand itself would go under, but the state of quality journalism is still dire, and for the NY Times, trying to sell its other newspaper assets to offset debt looks like a difficult task. Relatively few newspapers are making a healthy profit, and the future looks less than bright for the industry, with the Guardian executive Emily Bell recently claiming that five national British newspapers will die in the next two years.