Posted on 02/02/2008 8:38:46 AM PST by Milhous
[With apologies in advance to Martin Nisenholtz, who I believe is genuinely fighting the good fight, and who will no doubt end up with a great job at some fine Internet company.]
The hiring of Bill Kristol was the last straw.
I can't take it anymore.
I hereby inaugurate my New York Times Deathwatch, which will continue until the last Sulzberger has left the building.
Recent dispatches that are fit to print:
Leading the way [in terrible end-of-year news from the newspaper industry] was The New York Times Company, where total [quarterly] revenues fell 1.7% to $865.8 million, due mostly to a 4.1% drop in ad revenues... Advertising revenues at the news media group in particular fell 5.6%.
Source: Media Daily News.
Actually, that's being perhaps overly fair, since it takes into account an extra week last year. The straight year over year performance was:
[F]ourth-quarter revenue totaled $865.8 million, down 7.1% from $931.5 million a year earlier. The decline included a 9.1% drop in advertising revenue and a 4% fall in circulation revenue... [T]he company had an extra week in the final quarter of 2006, which boosted the year-earlier quarter's revenue by $50.8 million and its pretax income by $14.3 million.
Yes, we are dealing with a business where missing a single week means the difference between revenue falling 1.7% and 7.1%, and advertising revenue falling 4.1% and 9.1%. Go figure.
Source: Forbes.
Now, normally, beating up on someone like this isn't very much fun. But we are talking about a profession that specializes in passing judgment, often snide, on everyone else. And so, onward...
Turns out that December 2007 was particularly bad, and things may be getting even worse:
Separately, the [New York Times] reported that December ad revenue dropped 25.2%. Excluding an additional week in December 2006, ad revenue declined 12% for the month.
...[W]eakness across several national [advertising] categories including health care, books, technology products and transportation hampered results in the month. Classified ads, the traditional lifeblood of newspapers, saw steep declines in help-wanted, real estate and automotive sales. [Craig, you bad bad boy...]
"To date in January, the percentage decline in advertising revenue is trending similar to that of December..." said Janet Robinson, chief executive of New York Times...
As they say, sometimes it's darkest right before it goes pitch black.
Source: Marketwatch.
How are the company's other papers doing?
The [New York Times-owned] Boston Globe will soon announce cutbacks at the newspaper, including hundreds of layoffs, and an increase in the per copy price of the paper to 75 cents as of Feb. 1...
The Globe saw a nearly 7 percent decrease — from 386,417 to 360,695 — in its daily circulation between Sept. 2006 and Sept. 2007, according to numbers released in November by the Audit Bureau of Circulations. That report showed the paper’s Sunday circulation down about 6.5 percent...
When you have an obsolete, inconvenient physical product that nobody wants in an era of universal online access, the appropriate strategy is clearly to raise the price.
Source: Metro Boston, which amusingly itself is 49 percent owned by the Boston Globe, which is owned by the New York Times.
How about revenue at the Globe?
At the New England Media Group, which includes the Boston Globe, ad revenue fell nearly 16%. Circulation revenue fell 7%.
Source: Marketwatch.
How about the company's smaller newspapers?
The company's regional-media group, including papers in medium-sized markets such as Wilmington, N.C., and Santa Rosa, Calif., saw ad revenue decline almost 17%, while circulation fell 7.4%.
Source: Marketwatch.
Meanwhile, the Times faces its second assault from a major hedge fund in the last two years:
A hedge fund manager who acquired a stake in the New York Times Company and is pushing to gain seats on its board sent a letter to the company on Sunday in which he criticised directors as "ineffective" and called for it to shed more non-core assets.
Scott Galloway, founder of Firebrand Capital, who sent the letter, has joined with another hedge fund, Harbinger, to try to put forward their own nominees for the four independent seats on the media company's 13-member board at its meeting in April. The funds have amassed a combined 4.9 per cent stake in Times' shares.
Source: Financial Times.
An ineffective board? What could they be talking about?
Hmmmmm. That's not the direction you want to see those things go.
Well, given that the Internet is the central force dismantling the company's business, I'm sure that by now they've stocked their board with noted Internet experts. Let's see:
So, if you want to issue bonds to pay for FCC-approved snack cake manufacturing in a submarine on display at a national park by a sundress-wearing cigarette-puffing Levitra-popping Judy Miller, you're pretty much set.
Go team!
Harbinger is a New York affiliate of Harbert Management Corp., of Birmingham, Ala. It is led by Philip Falcone, a former hockey player at Harvard University who once ran junk-bond trading at Barclays Capital. The fund has turned up in an array of companies in the past year, accumulating shares in Northwest Airlines Corp. and Leap Wireless International Inc., among others. Last summer, it ran an unsuccessful proxy fight for seats on the board of Chicago steel company Ryerson Inc."They have done a good job managing money," says veteran media money manager Mario Gabelli, chief investment officer of Gamco Investors Inc., one of Media General's biggest outside investors and a small shareholder in the Times.
Harbinger, which scored big returns in the subprime-mortgage market in the past year, says its specialties include distressed situations. It is making two plays in the newspaper industry at a time when falling advertising and readership have created deep pessimism about the industry's prospects.
The Times is no exception to those trends. Its Boston Globe newspaper has been particularly hard hit.
Coral Ridge Ministries: Proclaiming truths that transform the world.
ping
Imitation is truly the sincerest form of flattery. We should be flattered!!
He shames his alma mater
Thank you for the ping Milhous
Mr. Sulzberger must take immediate action to rectify this grave matter.
Andreessen also garners his share of emoting detractors spewing subjective feelings to enable themselves to remain in denial.
Andreessen, You’re Off the Mark
Marc Andreessen is a smart guy and his blog has become a must-read for its insight but his latest post on launching the New York Times Deathwatch is so off the mark, it’s a joke.
Yes, the New York Times - like many other newspapers - is struggling with lower circulation and advertising revenue but, come on, it’s not like the NYT is going to disappear so slapping a deathwatch label on it is silly.
If Andreessen wants to provide some insight, he’d be better off talking about the NYT’s efforts to go digital than a post rooted in a “Chicken-Little-the-sky-is-falling” approach.
Does the NYT have its strategic and business issues? Definitely.
Is it struggling to find its way in a digital world? Of course.
But will the NYT disappear amid these challenges? No, although it will no doubt be a different looking company.
Maybe Andreessen is frustrated with the NYT’s weak stock performance or its inability to come up with an effective online strategy but the NYT still has significant assets and a strong brand, which makes a deathwatch, at best, strange.
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