It Does Not Matter Who Runs the New York Times

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It does not matter who runs the New York Times Company (NYSE: NYT). The clock is slowly winding down on its viability as a standalone company. The newspaper industry has been wounded too badly  for a firm like the Times to reverse its fortunes.

Janet Robinson, the CEO of the Times since 2004, announced she would leave in two weeks. The decision seems abrupt. It is as likely that she was pushed out as that she left on her own. The plans she has set to help the firm’s digital revenue overcome the drop in print sales has not worked. But the same plans have been a failure at every other newspaper chain.

One of the most telling details of the demise of the New York Times is the weakness of its digital revenue. Its division’s sales dropped from $32.5 million in the third quarter of 2010 to $25.7 million in the most recent quarter. The firm has made no statement that would indicate this drop will abate. Revenue at the company’s media group, its newspapers, fell from $522 million last year to $512 in the third quarter of 2011. Ad revenue was down 10%, and the new paid subscription business at the flagship paper has barely made up for that.

Digital ad revenue at the papers grew only 6.2% in the third quarter. That was the most critical number of all. The growth rate is not nearly enough to counter the attrition in print ad sales.

The New York Times has managed to slow the drop in its sales compared to its competitors. This may be because of its large size. It could be because the paper is considered a prestigious place to market products and real estate. But the fall-off has been relentless and the New York Times, with all of its resources, has not found a solution to the problem.

The greatest asset the Times has is its editorial staff. It will not be long, though, before the company has to cut that staff sharply. The trouble that begun under Robinson will continue, and it will not matter who is CEO for the next several years. The destruction of the New York Times Company has started in earnest.

Douglas A. McIntyre