Life not getting any easier over at our hometown newspaper. For the first time, CEO Janet Robinson acknowledged that the industry is in permanent secular decline. She also raised the possibility that the company could default on its debt. (For more, see: New York Times Running On Fumes)
- Revenue down 8%
- Ad revenue down gut-wrenching 13%
- Circulation revenue + 3% (price increase)
- Classifieds down a horrifying 28%
One bright spot:
- This fall actually not as bad as June, July, and August (-18%)
- Online revs up 12%, driven by About.com (+11%)
- Online ad revs up 14%
Sadly, the online revenue growth is a major deceleration. Also, online revenue unfortunately still accounts for 12% of overall revenue.
Separately, the NYT announced that it will likely cut or suspend its dividend as it frantically tries to conserve cash:
“In this difficult environment, we are reviewing our uses of cash. We have reduced our estimate for capital expenditures in 2008. Next year we expect they will decline from their 2008 level and be approximately $80 million. 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.
Lastly, ominously, the company also brings up the possibility of defaulting on its debt:
“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.
“We expect that we will be able to manage?” Translation: There’s a possibility that we won’t be able to manage.
For the first time (we know of), Janet also explicitly acknowledged that the industry is in permanent decline: “The impairment charge reflects the decrease in print advertising revenues stemming from the secular changes in the media industry.”
The New York Times has not yet responded to our excellent merger-and-restructuring offer. We assume they are evaluating it carefully. We look forward to hearing from them.
See Also: New York Times Running On Fumes
Trends lousy at Boston Globe, of course. But now even lousy at the flagship New York Times:
News Media Group
Advertising revenues for the News Media Group decreased 14.1% because of weakness in print advertising.
The New York Times Media Group – Advertising revenues for The New York Times Media Group decreased 11.7% in September 2008 compared with growth of 11.3% in September 2007. National advertising revenues decreased as weakness in the studio entertainment, media, hotel and live entertainment categories offset growth in corporate, financial services, home furnishing manufacturer and healthcare advertising. Retail advertising revenues decreased mainly due to lower preprint advertising. Classified advertising revenues were down because of weakness in help-wanted, real estate and automotive advertising. Home furnishing manufacturer and home furnishing store advertising benefited in the month from a shift in the timing of the fall issue of T: Design, which was published in September this year but appeared in October last year.
New England Media Group – Advertising revenues for the New England Media Group decreased 16.6%. National advertising revenues were lower mainly because of decreases in travel, pharmaceutical/packaged goods and hospital/healthcare advertising. Retail advertising revenues decreased primarily due to weakness in the department store, sports/toys, home improvement and furniture/home furnishing categories. Classified advertising revenues decreased mainly due to softness in real estate and help-wanted advertising.
Regional Media Group – Advertising revenues for the Regional Media Group decreased 22.1%. Retail advertising revenues were down mainly because of decreases in the home furnishing, home improvement, specialty store, telecommunications and department store categories. Classified advertising revenues decreased due to weakness in real estate, help-wanted and automotive advertising.
Internet advertising revenues included in the News Media Group increased 16.4% as strong growth in display advertising was partially offset by weakness in online recruitment advertising.
Circulation revenues for the News Media Group were up 3.0%. Revenues increased at The New York Times and New England Media Groups, and decreased at the Regional Media Group. In July 2008, The New York Times announced that home-delivery prices would increase an average of 4.5% upon the subscriber’s renewal date and for new subscribers. Effective August 18, the daily newsstand price of The Times increased from $1.25 to $1.50.
Advertising revenues at the About Group (which includes the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Calorie-Count.com) rose 10.9% due to growth in both cost-per-click and display advertising.
Internet Businesses: Total Internet revenues grew 11.7% and Internet advertising revenues increased 14.5% in September. Internet businesses include NYTimes.com, About.com, Boston.com and other Company Web sites. In total, Internet businesses accounted for 12.0% of total revenues in September versus 9.9% in September 2007.
In addition, The New York Times Company had the 11th largest presence on the Web, with 50.8 million unique visitors in the United States in September 2008 according to Nielsen Online, up approximately 15% from 44.2 million unique visitors in September 2007. Also according to Nielsen Online, NYTimes.com had 20.1 million unique visitors in September versus 14.7 million in September 2007, up about 37%, and was the No. 1 newspaper Web site in the United States, a position it has long held.