Another Downgrade For The New York Times

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Shares of The New York Times Company (NYT) are off as much as 2.5% today to a 52-week low on another analyst downgrade. Merrill Lynch cut the shares to "sell" from "neutral." The firm also put a "sell" rating on McClatchy (MNI) and Lee Enterprises (LEE), two other newspaper stocks.

The research call is late, very late. It has been evident for almost two years that falling print advertising was destorying the financial future of newspapers. Most have onlne editions, but they often produce little more than a few percent of overall revenue at major chains

The question now is where the newspaper industry will turn. It could being to cut circulation in a bid to save paper and distribution costs. It takes the risk that the readers will not move to the online version of the paper to get their news.

The other option is to begin to sharply cut the salaries of newspaper employees. Most papers have unions, but the reality of the crisis is not lost on them. Lower salaries would save some jobs. For now.

Douglas A. McIntyre

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