According to Janet Robinson, president and chief executive of The New York Times Company, told analysts how the company would survive the crippling newspaper industry. Most newspapers are cutting back international and national coverage and ceasing operations period. The Times Company, publishes The New York Times, The Boston Globe and the International Herald Tribune, by which does not carry crushing debt that caused other publishers to default or to file for bankruptcy. In all the company has been able to hold on to their revenue from ads and circulations.
The newspaper ad revenue fell 14.2 percent in 2008, a drop of 19.5 percent the last two years. Most major papers have reduced their sizes, but the Times newspaper has not reduced the size of their newsroom or the content of their pages. There is about 1300 staff members and the budget is over $200 million the largest in the country. The Times have gone to digital, web, blogs, slides shows,videos and have taken on Wikipedia. Also, there has been a large ad revenue for online and print that put a big squeeze on the companies cash flow. Because, of this the Times Company is looking to raise funds by selling their stakes in the Boston Red Sox's, and the company had to borrow $250 million with and very high interest rate of 14 percent from Carlos Slim Helu', a Mexican billionaire.
"Newspaper industry analysts say that despite some published alarms to the contrary, the company has positioned itself well to ride out another year of recession, maybe two. The company still operates at a profit, and analysts say it might have gotten by without the Slim loan, but could not afford to take the risk because borrowing could be even harder in six months or a year."
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The credibility and reputation of The Times may help the paper weather the recession better than others--although ad revenues have dropped, perhaps they haven't dropped as much as other papers. The diversity of the company's investments is a good thing as well. Still, after reading the article, I'm surprised that the company has so much debt (new building, buying back stock and huge loan), and further that executives are banking on the recession lasting a short time. Online ad revenues are down, and nothing much has changed on that front. It's all so risky, so I just hope this article is not just Times public relations talk. This is one newspaper that needs to stick around.
ReplyDeleteI think the New York Times will stay around for a while as well as the Boston Globe. We are a technology driven society. Everything we do now is on computers for the most part. Some of these smaller papers will soon be falling by the wayside, ones such as the Wichita Eagle. I hope that doesn't happen but it could happen. In the next few years, recession or not, everything will be on computers. Our tv shows, our newspapers, everything. Great post.
ReplyDeleteI read a similar article last week on how the NY times is better postioned than any other newspaper publishing company in the United States. Kudos to them for beating the system, or for coming up with a well balanced and thought out plan. This is a prime example of why the NY times is number one. Carefull consideration for the companies, and the workers who make up the paper, along with a stratigic plan to not only keep afloat in times of economic crisis, but actually manange to turn a profit. I would call all who are involved with this company "Masters of their industry." They have been able to stay one step ahead of our everchanging economy and people.
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