The parent company of the New York Times reported a first-quarter loss of $74.5 million yesterday.
From the N.Y. Times
The New York Times Company reported a first-quarter loss of $74.5 million on Tuesday, compared with a loss of $335,000 in the period a year ago, as it joined the roster of newspaper companies recording the steepest advertising declines in generations.
Advertising revenue at the company’s publishing segment fell 28.4 percent in the quarter, including an 8 percent decline in Internet advertising at the News Media Group.
The worst drop, 31.6 percent, occurred in the New England Media Group, which consists primarily of The Boston Globe and its site, Boston.com. The company has told unions at The Globe that the paper was on track to lose $85 million this year, and that unless deep cuts were made, the paper would be sold or closed.
Internet businesses accounted for 12.8 percent of the company’s revenue compared with 11.1 percent in the first quarter a year ago.
Other publishers have had similar declines in newspaper ad revenue in the first quarter, the sharpest drop since the Depression, and far worse than analysts predicted just a few months ago.
The Times Company’s total revenue of $609 million, down 18.6 percent from $747.9 million in the first quarter a year ago, fell more than $20 million short of analysts’ projections.
Newspaper circulation revenue recorded a slight gain, in the wake of price increases. And revenue at the company’s About Group, a collection of Internet businesses that includes About.com, fell 4.7 percent.
Despite the gloomy numbers chief executive Janet L. Robinson tried to paint a bright picture by saying that the company was well ahead of its goal to cut overhead expenses by $230 million and that the first quarter was traditionally the weakest one in the newspaper industry.
The cuts while painful are necessary for a paper that like most in the country is losing readership and advertsisers at a rapid clip. Though with each suceeding cut the net savings will diminish and at some point the paper could be so thin that no one will want to read it.
Management at the Times has put the company on a perilous path with the $250 million loan from Mexican billionaire Carlos Slim Helu at a steep 14% interest rate and the sale leaseback of their prized headquarters building in New York for $225 million. How do they expect to pay back a loan with an onerous interest rate or even remotely consider buying back their building when their revenues continue to decline?
The Sulzberger family has been asleep at the switch for far to long and at this pace it won’t be long before the empire ceases to exist.