The Death Of The New York Times (NYT)

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It is astonishing, but even the online revenue at the newspaper operations of The New York Times Company (NYT) has stopped growing rapidly. It is almost certain that the newspaper group excluding internet revenue is losing of money.

The entire NYT across of of its businesses made hardly any money at all. Preliminary third-quarter operating profit decreased to $10.0 million from $28.1 million in the third quarter of 2007.

The NYT purchase of The Boston Globe has turned into a fiasco. It will write down the value of that property and some small properties in New England by as much as $150 million.

The company shaded its internet performance a little in its press release. Online advertising grew 10.2% in the quarter. In total, our online revenues now account for 12.4% of the companys revenues. But internet sales as a whole grew by less. Total internet revenues increased 6.7% to $85.1 million from $79.7 million in the third quarter of 2007.

Total sales across all of the company’s businesses fell 9% to $687 million.

Among the comments made by management:

As part of our analysis of our uses of cash, we are evaluating future financing arrangements. Based on the conversations we have had with lenders, we expect that we will be able to manage our debt and credit obligations as they mature. Going forward, we plan to continue to explore opportunities to reduce our debt levels."

That would seem to mean the company has problems with its bankers.

"In addition, our Board of Directors plans to review our dividend policy before the end of this year to determine what is most prudent in light of the overall market conditions."

The means the founding Sulzberger family is going to start to run low on living expenses.

Results for the month of September, release separately, showed a 14% drop in newspaper ad revenue. Classified advertising across the division was off by almost 20%.

It would appear that the company’s problems are beyond solving if it does not begin to sell some of its core assets.

Douglas A. McIntyre