Yesterday, the New York Times Company held its annual meeting for shareholders in New York.
A sense of crisis envelops the Grey Lady. Rupert Murdoch is cranking up the volume at the Wall Street Journal. And the Sulzberger family has been forced to accommodate two activist investors on its board.
Reporting has tended to focus on what looks like a horrible set of Q1 financials. Here’s how the FT described the numbers, which were released on Thursday night:
The Times announced a $335,000 loss for the fourth quarter – down from a nearly $24m profit a year earlier.
And here’s the headline Editor & Publisher plastered over a story published yesterday: “Moody’s downgrades New York Times Co. To Notch Above Junk”.
Sounds bad? Yes. But beware: NYT Co.’s Q1 numbers (and the headlines) hide some peculiarities — in particular, an $18m write-off against the cost of cancelled IT development.
Write that back into the profit and loss account, and Q1 starts to look a whole lot different.
Oh, and that debt that’s only slightly-better-than-junk? Well, Moody’s also suggests that the company is managing its balance sheet conservatively, which is what you’d expect from a family-owned company.
It’s also worth noting that the New York Times Company contains a smorgasboard of different businesses. Drill down into the figures for the crown jewels — the newspaper at the centre of it all — and this is what you find:
New York Times Media Group Revenues: Q108
Advertising: $277m — down 6.9% YOY
Circulation: $165m — up 3.2% YOY
Other: $43m — up 2.9% YOY
Total: $486m — down 2.8% YOY
Yes, there are lots of things wrong with NYT Co., including a diversification plan that might as well have been dreamed up during a random sleepwalking episode chez Sulzberger. (Evidently, it’s a big house).
There are also some real questions to be asked about the group’s online strategy.
But in New York, the property market is falling through the floor, hedge funds are going bust and bankers are losing their jobs by the thousand. There’s a recession on.
A mere 2.8% decline in revenues at the New York Times itself makes the shouty headlines seem overdone.