Shrinking Income Continues at New York Times

By:  Bob Adelmann
Shrinking Income Continues at New York Times

As the New York Times' total yearly revenue fell by 1.1 percent while net income fell more than half, the Times tried to put a good face on things.

In its press release issued Thursday the New York Times did its best to put lipstick on its pig, noting declines in earnings per share over the last quarter and the last 12 months but claiming that this represented great progress and heralded an improving outlook for the future. Mark Thompson, the Times’ new president, exclaimed that "2013 was a busy year for the Company," adding,

We launched a new strategy, reorganized the Company, reenergized our advertising department under new leadership, rebranded out international newspaper as the International New York Times and sold the New England Media Group.

In 2014 we will build on those efforts with new digital consumer product launches beginning in the spring, new digital advertising products and a continued focus on international growth.

Call it lipstick, or whistling past the graveyard, Thompson is Titanic’s captain, throwing overboard anything that weighs down the ship and hoping to make port before it sinks out of sight. Fourth quarter revenues fell by more than five percent compared to a year earlier, while advertising revenues dropped more than six percent. For the year, total revenue declined by 1.1 percent while net income fell by more than half. This was the 13th straight quarterly decline in revenues for the emaciated Gray Lady.

In a peculiar accounting twist, the numbers were actually worse than they appeared due to the sale last summer of the Boston Globe and related properties. It appears that the Times’ accountants had all but written off that billion-dollar purchase and when it was sold to Fenway Park owner John Henry for $63 million, the sale had to be booked as a profit.

The timing of its decision to buy the assets of the New England Media Group (NEMG) which included the Boston Globe and other related assets in 1993 for $1.1 billion couldn't have been worse. In a board room decision to try to expand the Times’  influence up along the eastern seaboard, the investment was made one year before the unofficial beginning of the Internet revolution in 1994, and despite heroic efforts, NEMG never came close to realizing its potential. Six years later the Times’ board compounded its error by spending another $295 million to buy the Worcester (Massachusetts) Telegram & Gazette which became part of the package the Times offloaded onto Henry, taking a 95-percent shellacking in the process. This doesn't count the pension liabilities the Times was forced to keep as part of the deal.

In addition the Times found a buyer in 2007 for its Broadcast Media Group consisting of 10 radio and television stations for $575 million.

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