The New York Times (NYT) fell as low as $12.38 this morning after its second quarter earnings missed estimates. Profits plunged 82% to $21 mn versus the $118 mn posted in the same period a year ago, a period that was helped along by the one-time sale of an asset.
The share plunge is the lowest since July 1995. An historic come-down for the newspaper of record, given that in 2003, the stock traded at $45, notes Frazer Rice, a private banker in New York.
Print ads dollars at the Times continue to shrivel, sending operating income in a nosedive, as ad dollars continued their inexorable march toward the Internet. Hotels, automakers, airlines, all hurt by high energy prices, have pulled back sharply.
What exactly is wrong with the Times' business model? "Rightly or wrongly, the New York Times has had to serve three functions," says Rice, a private banker in New York. "One, inform the world; two, act as the moral barometer of the nation; three, turn a profit. All three of which are vital legs in the New York Times’ stool. The last one, turning a profit, is the one they are having, as the Irish would say, a spot of bother." So what's the problem? Although the Times has "many interesting properties like the Boston Globe and about.com," Rice says, it "has managed to be a follower in the information age as opposed to a driver."
Specifically, the Times is "being taken over by Google as people’s news gathering tastes were dictated by the marketing information that search engines had as opposed and the costs of newsprint and bureau chiefs soared to through the roof," Rice explains. "The fact is that the Timesis the brand leader in a product that is becoming more and more commoditized and whose brand is being co-opted by its individual journalists," adding, how many people do you know who buy the Times solely to read "Maureen Dowd, Thomas Friedman or Paul Krugman?"
The Times is hoping against hope that its mix of assets, including The Boston Globe, the International Herald Tribune, About.com, regional newspapers and a classical music radio station in New York can pull it out of its corkscrew dive south.
How to fix it? "Perhaps a relationship with Google or another search engine makes sense," Rice says. "The Times has failed to make any headway in the digital age, why not seek out the advice of the people who are making a killing in it?" Stay tuned.
Great article! Now I know to avoid using ABOUT.COM. I didn't even know they owned it.
July 23, 2008 at 1:03 pm
Tim
I was thinking the other day - what if FOX bought the paper and turned it into a "fair and balanced" factual paper with equal treatment of issues? What a novel idea that would be. I think it would help save it - otherwise, good riddance.
July 23, 2008 at 12:59 pm
Walter Bennett
They need to understand that unbiased reporting favoring one political viewpoint above all others will hurt their bottom line.
July 23, 2008 at 12:54 pm
bill mcniff
Maybe with this profit plunge they will get the message and start to fairly report the news and not add their bias or make the news.
July 23, 2008 at 12:24 pm
trace
I will throw a party the day it is announced that the NYT has folded. We will all wrap fish and sing "ding dong the witch is dead"
July 23, 2008 at 12:20 pm
Carla, Ballwin, MO
I've been a longtime subscriber to the NY Times Sunday edition. Since rejecting McCain's op-ed rebuttal, I'm thinking of cancelling my subscription. McCain/Romney 2008!!!
July 23, 2008 at 12:11 pm
tom
If their price dropped to a dollar it still would be overvalued:
As the saying goes," You Reap what you Sow"
July 23, 2008 at 12:05 pm
Joe
If the NY TImes keeps on inserting views as news then it better expect lower salesa and income. There just isn't enough fish being sold to support all that 'fish wrap' that the NY Times prints. Why don't they change the name of the paper to the DNC Times and leave it at that?
July 23, 2008 at 11:56 am
Tom Bargeron
NYT troubles were earned and are are well deserved.
July 23, 2008 at 11:51 am
chuck
Liz this has been going on for sometime now.
Vaniity Fair magazine has had some wonderful in depth articles about the problems at the times. I believe the reason that it has lost readership,circulation is the fact that it went left wing. I believe that turning down Senator McCain's Op-Ed is going to acerbate its problems more; the profits have been decrasing over the past few years. Makes me wonder if it's ripe for a merger and aquisition takeover sometime in the future. Already some of the leading liberal papers like the Tribune and Los Angeles Times has had lay offs. Now if the down profit trend continues reporter's layoffs from this grey lady may be in its future.
In my 9/11 collection I have one thier books on thier coverage of the tradegy. I glanced over the articles and it was some best of the best reporting I've read. I read NYT accounts in other books too.
What has done the times in? I believe with real time,mobile internets now, the news consumer has found other outlets with different perspectives on getting thier news. I can tell you about the local paper here the Vicksburg Post here,a family owned paper for generations,it's not preforming to well either. Becouse it's in competition with the Internet and the Jackson Clarion Ledger,USA today but the news consumer has more outlets for for information.
What does the family which owns the New York Times need to do? In my honest opinion: fresh leadership from publishing to editorial. A new branding way to reach its readers etc. It needs a real top down makeover if its going to reach the younger generations,keep its audiences young and old. If not the Flagship Times will be another liberal paper that bites the dust.
July 23, 2008 at 11:45 am
james d stout
i hope the pinko commie paper totally closes all of its doors!
July 23, 2008 at 11:43 am
Richard Terrell
It couldn't happen to a more appropriate newspaper. One of the most biased, liberal papers in the nation is having trouble in this "capitalist" society as they try to attract advertising. I wonder why? If they had their way, they would be the "spokesman" for the Obama presidency. No dissent allowed. You will shut up, McCain or we will deal with you. Your opinions are not welcome. We know what's best for you.
July 23, 2008 at 11:26 am
Jim Rogers
It,s no wonder they are failing. They are the most one sided liberal paper I have ever read. I hope they go out of business.
July 23, 2008 at 11:25 am
Tom
This is Great! Maybe they can all go to work for Hillary or Obama.
Elizabeth MacDonald is the stocks editor for Fox Business Network. She is recognized as one of the top prize-winning business journalists in the country, and has received 14 awards, including the top prize in business journalism, the Gerald Loeb Award for Distinguished Business Journalism, and the Newswomen's Club of New York Front Page Award for Excellence in Investigative Journalism.
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Jim Ellis
Great article! Now I know to avoid using ABOUT.COM. I didn't even know they owned it.
Tim
I was thinking the other day - what if FOX bought the paper and turned it into a "fair and balanced" factual paper with equal treatment of issues? What a novel idea that would be. I think it would help save it - otherwise, good riddance.
Walter Bennett
They need to understand that unbiased reporting favoring one political viewpoint above all others will hurt their bottom line.
bill mcniff
Maybe with this profit plunge they will get the message and start to fairly report the news and not add their bias or make the news.
trace
I will throw a party the day it is announced that the NYT has folded. We will all wrap fish and sing "ding dong the witch is dead"
Carla, Ballwin, MO
I've been a longtime subscriber to the NY Times Sunday edition. Since rejecting McCain's op-ed rebuttal, I'm thinking of cancelling my subscription. McCain/Romney 2008!!!
tom
If their price dropped to a dollar it still would be overvalued: As the saying goes," You Reap what you Sow"
Joe
If the NY TImes keeps on inserting views as news then it better expect lower salesa and income. There just isn't enough fish being sold to support all that 'fish wrap' that the NY Times prints. Why don't they change the name of the paper to the DNC Times and leave it at that?
Tom Bargeron
NYT troubles were earned and are are well deserved.
chuck
Liz this has been going on for sometime now. Vaniity Fair magazine has had some wonderful in depth articles about the problems at the times. I believe the reason that it has lost readership,circulation is the fact that it went left wing. I believe that turning down Senator McCain's Op-Ed is going to acerbate its problems more; the profits have been decrasing over the past few years. Makes me wonder if it's ripe for a merger and aquisition takeover sometime in the future. Already some of the leading liberal papers like the Tribune and Los Angeles Times has had lay offs. Now if the down profit trend continues reporter's layoffs from this grey lady may be in its future. In my 9/11 collection I have one thier books on thier coverage of the tradegy. I glanced over the articles and it was some best of the best reporting I've read. I read NYT accounts in other books too. What has done the times in? I believe with real time,mobile internets now, the news consumer has found other outlets with different perspectives on getting thier news. I can tell you about the local paper here the Vicksburg Post here,a family owned paper for generations,it's not preforming to well either. Becouse it's in competition with the Internet and the Jackson Clarion Ledger,USA today but the news consumer has more outlets for for information. What does the family which owns the New York Times need to do? In my honest opinion: fresh leadership from publishing to editorial. A new branding way to reach its readers etc. It needs a real top down makeover if its going to reach the younger generations,keep its audiences young and old. If not the Flagship Times will be another liberal paper that bites the dust.
james d stout
i hope the pinko commie paper totally closes all of its doors!
Richard Terrell
It couldn't happen to a more appropriate newspaper. One of the most biased, liberal papers in the nation is having trouble in this "capitalist" society as they try to attract advertising. I wonder why? If they had their way, they would be the "spokesman" for the Obama presidency. No dissent allowed. You will shut up, McCain or we will deal with you. Your opinions are not welcome. We know what's best for you.
Jim Rogers
It,s no wonder they are failing. They are the most one sided liberal paper I have ever read. I hope they go out of business.
Tom
This is Great! Maybe they can all go to work for Hillary or Obama.