Crunching the New York Times numbers
The New York Times Co’s announcement on Thursday that it’s cutting its dividend by almost 75 percent is a pretty grim indicator of the fortunes of the storied newspaper publisher. It also is fraught with implications. It prompted us to put some of the numbers in perspective, but first, here’s a recap of the news:
NEW YORK (Reuters) – The New York Times Co slashed its dividend by almost three-quarters and plans to cut spending and reevaluate its assets to cope with an advertising decline that is gouging U.S. newspaper publishers.
The trustees of the Ochs-Sulzberger family’s shares in the Times said on Thursday they support the company’s actions.
“The trustees remain unanimous in their commitment to the editorial integrity and independence of the New York Times,” they wrote in a statement.
This is significant because industry watchers and media experts say the family is under more pressure than ever before to sell parts or all of the company.
Here are some ways of defining “pressure:”
- The company is worth $725 million. When it bought The Boston Globe in 1993 it paid about $1 billion.
- Its publicly traded shares were worth $49 two years ago.
- The ratio of the share price to the cover price of the Sunday edition of the Times is under 2:1.
- The ratio of the share price to the daily cover price is under 5:1.
Rule #1 in the newspaper business: FIRST, have something to sell. Nobody wants to pay for advertising when there’s no circulation. Why do you think Rupert Murdoch is rich? Tear the thing apart, write some stories, and beef up circulation. You don’t have to BE Rupert Murdoch; just don’t be what everyone else is selling. Then go after someone other than Van Cleef and Arpels, Blue Cross, and car dealers as advertisers. There are lots of businesses out there. You’re WELCOME!