Thursday, 13 November 2008

NYT Company stock now at distressed price: $7.70. What next? Capitalism 2.0's first philanthropic newspaper?

It wasn't so long ago that I was writing that if NYT Company stock fell below $10, that we would be at a tipping point.

As of market close yesterday, NYT Company stock was at $7.70, just 2 cents higher than its lower ever price. I wonder how Mr. Santos and those private investors are feeling now, having seen the value of their investment nearly half in three months. (-43%), which I critiqued some time before it was rumoured it would be sold, is no doubt proving to be a tougher sell than expected - basically the NYT Company owns a web site with lots of content but which the younger, more savvy, upscale web generation treat pretty much with disdain. Hard to shift to reduce that debt.

Boston Globe? Who wants to buy that?

And as for the IHT, there seems to be something in the argument that the NYT Company is in fact reducing the value of an asset it holds. They've already given up on with their plans to roll it into (hardly an asset value increase move).

My view is, that at these prices, the NYT Company family must be buying shares with a view to taking it private.

My long term prognosis now is leading me to think that unless the NYT Company can reveal a game changing idea or acquisition, the price will continue to be hammered, which leaves the family with the very attractive proposition of taking it private, perhaps with the assistance of some sort of management buyout and/or collection of very rich New York investors more interested in keeping 'their' newspaper alive, seeking modest dividends - or at least prepared to wait out a prolonged zero dividend period whilst debt is reduced.

On the subject of management or employee buyout, let's be honest: stock option packages at the moment aren't looking that thrilling and the job market for staff, B-side or edit, is hardly any better. So as part of this, everyone takes a 15-25% paycut. I can see lots of employees who would be more than happy with that in the current media employment market.
Even the likes of Kristof, Krugman and Dowd might be prepared to swallow it, given their attachment to the value of a free press and their liberal ideologies, and that goes for most of the newsroom.
As for the B-side, the job market is basically dead, so what else are they going to do. Some will go it alone into New Media, some editors too perhaps. But a lot love this institution.
Family says we won't be taking a dividend or a salary -Golden, Sulzberger - and you guys have got to take this as part of the new Sulzberger-Ochs Foundation NYT.
Subscribers may even be asked to put their hands in their pocket for some sort of stock/subscription deal or just a price increase. If you love us so much, pay more, because we're prepared to lose readers and hang on to wealthier ones because our profits are going to be coming crashing down anyway.

In other words, a private sector, philanthropic type bailout.

CSM may be going weekly and web only (and that's a non-profit organisation).

The NYT may become Capitalism 2.0's first philanthropic newspaper - a newspaper working as a genuine public service without all those nasty speculators and investors hassling the family. That gives them time to breathe, pay off the debt, and re-position, re-tool for a new future.

I'd say, if you love the NYT and want it to continue, and have spare cash and don't seek a return on it, start buying.

I'd also say there will be no money any time soon to market the IHT, which, with the end of makes the end of the IHT and the beginning of the International New York Times highly likely in 2010.

That's not to say that the INYT will become an international version of the NYT, nor that the content or even design (beyond the planned treading water re-design we will see next year) of the IHT will radically change.

Simply, this company can't afford to market two media brands, and one of them globally, in 2009/2010.

So it's fold into INYT - with possible cost reducing move from Paris - or sell brand to vanity publisher e.g an Emirate, based out of one of their media cities?

How much would the Sheiks love to be seen to own a primarily Jewish owned newspaper (in terms of family voting shares) but also be seen to be hands off, democratic media owners?

Frankly, in current market conditions who else is going to buy it? An Icelandic bank?

Dubai here we come, but we'll always have Paris.

There are alternative game changing ideas out there, but I'm sensing a degree of sang-froid cool or complete corporate inertia. This is disonsaurs standing in falling volcanic ash time. Move, adapt, change or die.

New York Times Co
(NYT:NYQ) NYT on other Exchanges
7.70 USD Last
-0.68 -8.11% Change
915.8K Below Average Volume

Data as of November 12, 2008 16:04 exchange time. Market data is delayed by at least 20 minutes.
Today's Open
8.27 USD
Previous Close
8.38 USD
Today's High
8.29 USD
Today's Low
7.68 USD
Today's Volume
Avg Volume (10 day)


"Books about cosmopolitan urbanites discovering the joys of country life are two a penny, but this one is worth a second glance. Walthew's vivid description of the moral stress induced by his job as a high-flying executive with the International Herald Tribune newspaper is worth the cover price alone…. Highly recommended."
The Oxford Times

'I read
A Place in My Country with absolute unalloyed delight. A glorious book.'
Jeremy Irons (actor)

‘Ian Walthew was a newspaper executive with a career that took him round the world, who one day did a mad thing. He saw a for-sale sign on a cottage in the Cotswolds, bought it, resigned and moved in. For the first few weeks he just lay on the grass in a daze. Then he started talking to his neighbours and digging into the rich history of this beautiful part of England. Out of his inquiries grew this affecting and inspiring memoir.What sets it apart from others of its ilk is the author’s enviable immunity to cliché and his determination to love his homeland better than he used to.
Financial Times

For more reviews visit

No comments: