More Pulitzers, Less Money: New York Times Ad Sales Down 27 Percent; Q2 Looks Just as Bad
by Peter Kafka
Posted on April 21, 2009 at 5:51 AM PT
Yesterday the New York Times won five Pulitzer Prizes, and executive editor Bill Keller took a well-deserved victory lap with a speech that reportedly had his newsroom in tears.
But for better or worse, none of that matters to investors, who are trying to figure out what the company’s long-term prospects look like. In the near term, they look terrible.
In the first three months of this year, the New York Times Company (NYT) lost $74.5 million, or 34 cents a share once you factor out one-time charges, on revenue of $609 million. That’s worse than Wall Street’s low expectations of a five-cent loss on revenue of $630.8 million.
The reason, of course, is that the ad market is miserable in general, and even more so for newspapers. The company’s ad revenue was down 27 percent, notably worse than the awful 17.6 percent decline the Times recorded in the last quarter of 2008.
And as in the last quarter, former bright spots like the Internet business have now gone dark as well: Internet revenue was down 5.6 percent, Internet ad sales declined 6.1 percent, and revenue at the Times’s About.com unit dropped 4.7 percent.
Expect more of the same for the second quarter of this year, warns CEO Janet Robinson: “At this time, and it is early in the quarter, we believe the rate of decline in ad revenues in the second quarter will be similar to that of the first.”
The Times has been trimming costs (via salary cuts and layoffs) and has bought itself a bit of breathing room by getting rid of its dividend, taking on a very expensive loan from Mexican billionaire Carlos Slim and selling off assets like its Manhattan headquarters. It still has some moves it can make–it is trying to unload its stake in the Boston Red Sox and to find a buyer for the Boston Globe.
But at some point it’s going to have find a way to start selling more ads again. Because awards alone won’t save the paper–Pulitzers can’t even guarantee their winners’ continued employment.
The Times has stopped providing monthly revenue updates, but it has been pretty good about providing detail via its earnings calls. I’ll be on the road during today’s 11 a.m. call, but will check the transcript and get back to you later with the most interesting nuggets.
Comments
Is it me or did you guys shrink the size of the font in posts? I can barley read it! Adjusting the font in the browser breaks sites. :/
Posted by Bjorn Tipling at April 21st, 2009 at 6:57 amI don’t understand why they don’t start charging for content. I read multiple articles on the NYTimes site nearly every day and would pay for it if they asked me to. Why don’t journalists–the good journalists, writing well-reported, well-written content you can’t easily get elsewhere–start demanding to get paid for what they do?
Posted by Lisa Post Tornes at April 21st, 2009 at 5:38 pmBjorn, I checked. The answer, from our tech crew: It’s you. The font size has stayed the same.
Posted by Peter Kafka at April 21st, 2009 at 8:24 pmOk, thanks for checking. :/
Posted by Bjorn Tipling at April 21st, 2009 at 8:58 pm