Peter Kafka

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Why The Times Cut Its Dividend: Revenues Shrank Again in October

The New York Times (NYT) has slashed its dividend by 74 percent, which could save it nearly $100 million a year. The cuts will cost the Sulzberger family, which controls the paper and has been receiving some $25 million a year in dividends, more than $18 million.

The move is one of several the paper is going to make if it’s going to service its $1.1 billion debt load. It is also “re-evaluating assets” (i.e., looking for spare parts to sell), and while it has told its editorial staff that it will try not to fire anyone, it couldn’t make an ironclad promise.

That’s because the paper’s financial results continue to decline, and there doesn’t seem to be any light at the end of the tunnel. Even the promise of the Internet, where the paper has been devoting substantial resources and effort, is dimming.

The newest numbers, released yesterday: Revenue at the company decreased 9.4 percent in October, which is an acceleration from September, when revenue dropped eight percent. Ad revenue dropped 16.2 percent, compared to a 13 percent drop in the previous month.

And while the paper’s digital side is still growing, it’s growing much more slowly: Internet ad revenue grew just 5.3 percent, down from 16.4 percent in September; total Internet revenue, including the company’s unit, was up 4.3 percent, down from 11.7 percent.

Is there any good news? Just a sliver: The Times’s readers still value the paper. Circulation remains steady, but circulation revenue continues to creep up. It bumped up 3.9 percent last month, up from three percent growth in September. But it doesn’t matter how loyal the Times’s readership is if the company can’t pay its bills. Expect more turmoil ahead.

[Image Credit: Joe Shlabotnik]