Inaugurating the New York Times Deathwatch

[With apologies in advance to Martin Nisenholtz, who I believe is genuinely fighting the good fight, and who will no doubt end up with a great job at some fine Internet company.]

The hiring of Bill Kristol was the last straw.

I can’t take it anymore.

I hereby inaugurate my New York Times Deathwatch, which will continue until the last Sulzberger has left the building.

Recent dispatches that are fit to print:

Leading the way [in terrible end-of-year news from the newspaper industry] was The New York Times Company, where total [quarterly] revenues fell 1.7% to $865.8 million, due mostly to a 4.1% drop in ad revenues… Advertising revenues at the news media group in particular fell 5.6%.

Source: Media Daily News.

Actually, that’s being perhaps overly fair, since it takes into account an extra week last year. The straight year over year performance was:

[F]ourth-quarter revenue totaled $865.8 million, down 7.1% from $931.5 million a year earlier. The decline included a 9.1% drop in advertising revenue and a 4% fall in circulation revenue… [T]he company had an extra week in the final quarter of 2006, which boosted the year-earlier quarter’s revenue by $50.8 million and its pretax income by $14.3 million.

Yes, we are dealing with a business where missing a single week means the difference between revenue falling 1.7% and 7.1%, and advertising revenue falling 4.1% and 9.1%. Go figure.

Source: Forbes.

Now, normally, beating up on someone like this isn’t very much fun. But we are talking about a profession that specializes in passing judgment, often snide, on everyone else. And so, onward…

Turns out that December 2007 was particularly bad, and things may be getting even worse:

Separately, the [New York Times] reported that December ad revenue dropped 25.2%. Excluding an additional week in December 2006, ad revenue declined 12% for the month.

…[W]eakness across several national [advertising] categories including health care, books, technology products and transportation hampered results in the month. Classified ads, the traditional lifeblood of newspapers, saw steep declines in help-wanted, real estate and automotive sales. [Craig, you bad bad boy…]

“To date in January, the percentage decline in advertising revenue is trending similar to that of December…” said Janet Robinson, chief executive of New York Times…

As they say, sometimes it’s darkest right before it goes pitch black.

Source: Marketwatch.

How are the company’s other papers doing?

The [New York Times-owned] Boston Globe will soon announce cutbacks at the newspaper, including hundreds of layoffs, and an increase in the per copy price of the paper to 75 cents as of Feb. 1…

The Globe saw a nearly 7 percent decrease — from 386,417 to 360,695 — in its daily circulation between Sept. 2006 and Sept. 2007, according to numbers released in November by the Audit Bureau of Circulations. That report showed the paper’s Sunday circulation down about 6.5 percent…

When you have an obsolete, inconvenient physical product that nobody wants in an era of universal online access, the appropriate strategy is clearly to raise the price.

Source: Metro Boston, which amusingly itself is 49 percent owned by the Boston Globe, which is owned by the New York Times.

How about revenue at the Globe?

At the New England Media Group, which includes the Boston Globe, ad revenue fell nearly 16%. Circulation revenue fell 7%.

Source: Marketwatch.

How about the company’s smaller newspapers?

The company’s regional-media group, including papers in medium-sized markets such as Wilmington, N.C., and Santa Rosa, Calif., saw ad revenue decline almost 17%, while circulation fell 7.4%.

Source: Marketwatch.

Meanwhile, the Times faces its second assault from a major hedge fund in the last two years:

A hedge fund manager who acquired a stake in the New York Times Company and is pushing to gain seats on its board sent a letter to the company on Sunday in which he criticised directors as “ineffective” and called for it to shed more non-core assets.

Scott Galloway, founder of Firebrand Capital, who sent the letter, has joined with another hedge fund, Harbinger, to try to put forward their own nominees for the four independent seats on the media company’s 13-member board at its meeting in April. The funds have amassed a combined 4.9 per cent stake in Times’ shares.

Source: Financial Times.

An ineffective board? What could they be talking about?


Hmmmmm. That’s not the direction you want to see those things go.

Well, given that the Internet is the central force dismantling the company’s business, I’m sure that by now they’ve stocked their board with noted Internet experts. Let’s see:

  • Brenda C. Barnes — CEO of Sara Lee; noted snack cake expert

  • Raul E. Cesan — former CEO of Schering-Plough; noted Levitra expert

  • Daniel H. Cohen — president of DeepSee LLC, “an oceanic exploration and submarine leasing company”; noted Jacques Cousteau expert

  • Lynn G. Dolnick — former head of exhibits for the National Zoologic Park in Washington DC; noted marsupial expert

  • Michael Golden — current publisher of the International Herald Tribune; former head of the company’s Women’s Publishing Division; noted sundress expert

  • William E. Kennard — former head of the FCC; noted “seven dirty words” expert

  • James M. Kilts — former CEO of Gillette; noted smooth, smooth shave expert; prior to that, unindicted coconspirator at Philip Morris; noted expert on your grandfather’s hacking cough

  • David E. Liddle — here I have to take a pause as I actually know this one; based on what’s happening at the company, it could be reasonably asked whether he’s actually attending the board meetings.

  • Ellen R. Marram — former CEO of Nabisco; noted Oreo expert. Oh, wait, she actually ran an Internet company: “From 1999 until 2000, Ms. Marram was president and chief executive officer of efdex Inc. (the Electronic Food & Drink Exchange), an Internet-based commodities exchange for the food and beverage industry.” Ooh. I wonder if that ended well.

  • Thomas Middelhoff — former CEO of Bertelsmann; noted expert on complicated family politics — well, that’s probably coming in handy…

  • Janet L. Robinson — current CEO of the New York Times Company; noted expert on horrific business implosions

  • Doreen A. Toben — CFO of Verizon; noted 30-year debenture expert

  • And finally, Arthur O. Sulzberger, Jr. — the Big Kahuna — the Man — the Guy In Charge — the chairman and scion — the dude with the cojones to actually defend Judy Miller. Not noted Internet expert.

So, if you want to issue bonds to pay for FCC-approved snack cake manufacturing in a submarine on display at a national park by a sundress-wearing cigarette-puffing Levitra-popping Judy Miller, you’re pretty much set.

Go team!