The Gray Lady turns a deathly shade of pale

American Thinker ^ | January 26, 2009 | Thomas Lifson

[St. Louis Conservative]

Arthur Ochs "Pinch" Sulzberger Jr. has driven the proudest institution in journalism to the doorstep of ruin, its corporate debt earning the humiliating label of "junk" from Moody's Investors Services. And it wasn't just a slide over the line, the company tumbled three steps below investment grade.

Even worse is Moody's negative expectation, meaning further downgrades are on the horizon in the next 12-18 months. Moody's has withdrawn its rating for NYTCo commercial paper, its unsecured corporate borrowing. Nobody in his right mind is going to loan the company money that way anymore.

The terms of the company's $250 million loan from 2 companies controlled by Carlos Slim Helú, the Mexican billionaire the paper once scorned, force the Times to pay over 14% to borrow money. The added interest cost, especially the 11% that is paid in cash (the other 3% gets added to the debt balance, just like a credit card bill that can't be paid in full), is one factor in Moody's downgrade:

"In Moody's opinion, earnings pressure and higher cash interest costs will limit free cash flow generation in each of the next two years notwithstanding a significant reduction in capital spending, and the recent 74% cut in the dividend."

[Dr. Ursus]

Slim Shady to the rescue!

[jessduntno]

“Arthur Ochs “Pinch” Sulzberger Jr. has driven the proudest institution in journalism to the doorstep of ruin, its corporate debt earning the humiliating label of “junk” from Moody’s Investors Services.”

I’ve been rating it junk a lot longer than that...

[Skooz]

BFL

[massgopguy]

Dividen a un tonto y su dinero pronto.

[Savage Beast]

Truth is fascinating, but propaganda is boring!

[edcoil]

The Old Gray Liar is in trouble?

[unixfox]

Maybe they can turn it around by making it a Spanish only newspaper. They cater to ILLEGALS anyway.

[FastCoyote]

And here I thought Carlos Slim Helú was bailing them out, looks like he’s just putting a 14% nail in their coffin.

Whoohoo!

[cookcounty]

Remember the old days when you thought of the Times as “very comprehensive”?

That was a big part of their appeal

But last week, 250,000 showed up for a pro-life rally in Washington, and according to the Times...It Didn’t Happen!!!

They work verrrrry hard to insult 50% of the population, and then they wonder why their circulation is dropping.

[Radagast the Fool]

Maybe we can house all of the Gitmo population in the Slimes building. And, of course, all the Slimes employees need to be in the building 24/7.

And remember, the Slimes hates guns...could be fun!!!

[Dr. Ursus]

The 50% that read and think.The only thing that liberals do
well is rig elections.Sad,but this seems to be the only thing that counts in the U.S. nowadays.

[randog]

Only recently has the company tightened some rather lavish expense account practices:

* News staff can no longer take each other out for drinks and charge it to the company! They had a great deal going there, going out with your colleagues for drinks and maybe dinner.

* New per meal expense limits: $50 for dinner, $30 for lunch, $15 for breakfast. The high end places are now out of bounds. Apparently earlier, they weren't.

* And even after the memo announcing expense account cuts was issued, Maureen Dowd wrote a story about "spa guilt" among the rich, deducting the expenses she incurred at a luxury spa.

Shareholders have lost between 80 and 90 percent of their investment in the company's common stock over the last 5 years, while the Times journos have merrily enjoyed the elitist lifestyle bubble on the company dime in Manhattan and capitals around the world.

----------------------------

I like that buy-your-cubemate-a-drink policy. "Hey Bob, lemme buy you lunch today!"..."OK, but only if you let me buy drinks!"

[madinmadtown]

The media demonizes the saints and canonizes the sinners. They spit in the face of the people who pay their bills through subscriptions and advertising and they blame all of their woes on the internet. The internet is a factor, but not the only factor. I would guess that liberals are more likely to read the paper at the library or at work where someone else is paying for the subscription.
And in my more paranoid moments I think it is a grand design so that we will only have one source of information in the future...the Pravda model

[Donald Rumsfeld Fan]

Carlos Slim Helú

[Inwoodian]

Oh, goodie!

[STONEWALLS]

....and more Mondsay good news....the McClatchey chain of Leftist newspapers has been trading under $1.00 for the last 5 straight sessions....if a stock goes 30 straight days under $1.00 it can be de-listed by the NYSE....and that’s pretty much curtains.

[USFRIENDINVICTORIA]

McClatchey could delay the inevitable(?) by engineering a reverse stock split. That would put their stock above the $1.00 minimum — for a while, at least.

[InABunkerUnderSF]

The terms of the company's $250 million loan from 2 companies controlled by Carlos Slim (y) Helú, the Mexican billionaire the paper once scorned, force the Times to pay over 14% to borrow money.

I hear there's a guy in Brooklyn who would have only charged them 12% but couldn't come up with a cool quarter bil on such short notice.

Seriously, This suggests we are looking at inflation rates in excess of 14%. Carlos has a habit of loosing his @$$ on business dealings in the US. He's really good at scamming Mexicans though.

As for The Times, they should have expected this. When you spend your existence supporting the party that has converted America's once great public education system into a government run daycare and political indoctrination system for children ages 5 to 18 churning out vast numbers of ignorant semi-illiterates, you should expect to go broke if your business relies on people being able to read.

[InABunkerUnderSF]

McClatchey could delay the inevitable(?) by engineering a reverse stock split. That would put their stock above the $1.00 minimum — for a while, at least.

McClatchy only turns over about 500,000 shares a day. If they reduce the number of shares via a reverse split they could run into liquidity rules problems. I'm not sure how much volume you have to turn over on average to stay listed but I do know, having worked for a failing Silicon Valley company, that it's a delicate balance.