The New York Times Co. has been shedding its non-core assets, smoothing its cost structure, strengthening its balance sheet and rebalancing its portfolio with such haste over the past two years that only a cruel and unusual press critic would urge it to quadruple those efforts.
I am that cruel and unusual press critic.
The company was a diversified media outfit 10 years ago, owning eight television stations; two radio stations; 16 newspapers in addition to the New York Times, the Boston Globe and the International Herald Tribune; and a slew of websites. It had a market cap of about $7 billion. Today, the emaciated operation is worth a notch over $1 billion on a good day.
The television stations were liquidated in 2006, but the most aggressive dismantling began 20 months ago, as piece by piece the Times Co. steadily broke off chunks of itself and put them up for sale. To Barry Diller’s IAC/InterActiveCorp went the About Group for $300 million and to Halifax Media Holdings its Regional Media group of newspapers for about $145 million. The company shed its stake in the Fenway Sport Group (Boston Red Sox) in two installments for a total of $180 million and sold off its share in the job-search engine Indeed.com for $164 million. The stripping of the old media conglomerate to its Times-ian essence—the Times itself and the rebranded International Herald Tribune as the International New York Times—will be complete when it finds a buyer for the Boston Globe and its allied properties. One research analyst predicts the Globe could go for $175 million provided the Times Co. covers the pension liabilities.
On the cost-cutting side, the Times, which has repeatedly waved wads of buyout cash at its staff to reduce headcount, most recently persuading an additional 30 of its 1,100-plus journalists to leave the building permanently. (Disclosure: One of those departees is Jim Roberts, who just became my boss’s boss at Reuters.)
But these efforts at getting smaller aren’t guaranteed to save the company. The Times‘s business model shifted last year, as the newspaper began to reap more revenue from its subscribers than its advertisers, reversing the ancient daily newspaper equation. This shift is less a marker of the growth of subscriber revenue ($781 million last year) than it is of the ongoing decline in ad revenue ($700 million last year) that is plaguing the Times and other newspapers. Print advertising, long in decline at the Times Co. newspapers, dropped again in 2012, which is true of the entire industry. The growth in digital Times subscriptions isn’t even a half-full glass, as Henry Blodget recently explained at the Business Insider: “[D]igital simply generates much less revenue per reader than the print business.”