New York Times Co. CEO Janet Robinson and CFO James Follo said no asset at the company is sacred–save for the New York Times newspaper–and that all would be evaluated for their strategic value to the company going forward.
That includes the Boston Globe, Robinson told the Bear Stearns media conference in Palm Beach, Fla*.:
Many people have asked whether we would consider selling the Globe. Anybody evaluating a divestiture needs to keep in mind the market for newspapers, as well as the low tax base of our assets like the Globe. The bottom line is that we constantly evaluate our portfolio for both strategic fit and financial performance, and we will continue to do that.
The Times execs did not address the substance of any talks with the hedge funds trying to gain seats on the board, but did say the company’s priority is to expand its digital businesses in 2008. In the print business, things don’t look so good. January print revenues were down 9.8% with particular weakness in telecom and automotive spending nationally, and employment and real estate classifieds locally.
*An earlier version of this story incorrectly attributed Follo’s comments to Robinson.
Notes from New York Times Co. President and CEO Janet Robinson at the Bear Stearns media conference:
Are you trading dollars for pennies as you transfer classifieds from the paper to online?
Robinson: We have entered partnerships with Monster and Yahoo to increase our power and strength in the online classified world. Partnerships have brought more revenue into the organisation. In help wanted and real estate there have been some cyclical issues. I think there are ways to make the partnerships work to help capture revenue we are losing from print classifieds.
Robinson: Yesterday web traffic at 2pm scaled 60% when Spitzer scandal broke on the site.
With some assets considered trophy-like, how do you go about assigning values to them?
Follo: We assess the capital markets, likely buyers. Assess how we can improve the business given the revenue headwinds we are facing. We love all our assets but we are not married to any one of them. When we feel we can maximise value for the company we do a deal, but we won’t do one unless we can get full value. We are not married to any one asset other than perhaps the NY Times newspaper.
What are weakest national ad categories?
Robinson: Telecom, automotive, real estate and help-wanted very weak. Luxury brands and retail are best ad categories.
Q&A begins …
9:47 am: In 2007 we made new media acquisitions totalling $35 million. We will regularly evaluate other Internet acquisitions as well as evaluate current business to see that they continue to meet goals.
9:44 am: The building is a significant asset to the company that has appreciated since it was built. Leasing five floors and the Times centre for events. Don’t believe a sale lease-back of the building creates any value for shareholders.
9:42 am: Headcount decreased 8% over the last two years despite increase in number of people working in digital.
CFO James Follo takes over presentation…
9:39 am: Times and CNBC in content agreement staring in January for business and finance videos. Robinson wants to expand relationship with Google, but gives no details. Regional papers in agreement with Yahoo. Times and three other publishers created ad network QuadrantOne.
9:38 pm: Research and development unit works across all digital units to integrate print, mobile and the Web. R&D team is upgrading video facilities to upgrade the number and quality of Web videos.
9:36 am: Robinson says NYT has launched 50 blogs!
9:34 am: Times Company had 51.6 uniques in January, up 21% from January 2007. More uniques than Facebook, NBC or MTV. $330m in digital revenues in 2007, up 22%. Digital revenues count for 10% of the total.
9:32 am: Number of people who subscribed to the NY Times for two years exceeded 800k for the first time in 2007. Opened print distribution centres in Dallas, Salt Lake City, and Philadelphia. Expect new centres to reduce distribution costs.
9:31 am: Evaluating a possible divestiture of the Boston Globe. But any possible sale would have to take into account low valuations. Community papers could also be sold, but Robinson says a comparable group has been on the market and not sold.
9:29 am: Robinson talking about “T” and “Play” magazines as new vehicles for luxury advertising. Nielsen company will sponsor the entire Olympics issue of “Play.” Company launched “T” online to expand luxury goods advertising.
9: 28 am: Overall print advertising and circ have been declining across the industry. Our goal is to grow the digital business to offset the declines.
9:27 am: In early 2008 seeking weaker economy. Jan ad revenue down 9.8%. Internet revenue also slowed due to less recruitment ads and automotive.
9:26 am: 2007 online revenues up 22%. Circ revenues rose 2%. Operating costs decreased 2%. Had asset sales $650 million. Increased dividend 31%.
Robinson’s preamble: 2007 was a difficult year. We must make smart acquisitions to expand our digital holdings. We are transforming this company to compete and succeed in the future. We believe we can stay true to our core values, and reward shareholders who stay with us in the long term.
Company transforming from print to one that delivers content digitally. Four keys: introduce new products online, build research capability, cut costs, and rebalance portfolio by divesting assets that no longer fit in the company.