New York Times Company to be bailed out by private investors?

I've been blogging for some time on the very real possibility of the NYT Company taking themselves private as part of some sort of philanthropic bailout by civic minded members of the great and the good of New York. No pressure to make vast profits, worry about shareholders etc.

Interestingly, this tongue in cheek piece from Businessweek, like any satire, has more than a grain of truth behind it.

The money won't come from government, but it may come from a group of very rich, liberal investors.

I wonder if the Family are working the dinner parties and putting out feelers to see if anyone is willing to throw their hat into the ring?




Media Centric November 13, 2008, 5:00PM EST

A Bailout Plan For U.S. Newspapers
A modest proposal for a lobbying campaign to save America's battered dailies
By Jon Fine

TO: Senior executives at U.S. newspaper companies
FROM: Tongue & Cheek Lobbying Innovations LLC
The post-Election Day landscape brings great change for America and its governing philosophy, and this is why we must move quickly to craft a federal bailout for the newspaper industry.
I know from some previous discussions that not all of you agree. Unlike with banks, the collapse of American newspapers does not endanger the world's financial system. Unlike car companies, the newspaper industry does not lose billions of dollars each month. No matter. We can position this as a proactive move to save the only industry prominently mentioned in the Bill of Rights. (Our message team likes that last bit. You'll hear it a lot.) This industry employs over 52,000 journalists, thousands of other workers, and it faces unprecedented challenges. It takes more than a quadrennial sales spike from a closely watched election to save newspapers. Also, the bailout money is there, and—ask any struggling retailer or chain of hair salons soon to claim that they, too, are banks—it won't be there forever.
An Obama Administration will likely show little love for the workaday press, as a simple holler out to your reporters that covered his campaign will confirm. (If you still employ campaign reporters, that is.) But Barack Obama is a civic-minded man. He will appoint civic-minded staffers. They may not love reporters, but they grew up with newspapers. They won't want them to go away, especially since we will paint a news paradigm without papers as being dominated by Fox News and bloggers banging on spittle-flecked laptops.
Decades ago, legislation passed to allow joint operating agreements between competitive local papers, in order to preserve diverse editorial voices. Our mission today will be cast as preserving educational voices.
Two potential Newspaper Rescue Acts:
Debt Relief/Subsidization. The U.S. assumes all outstanding debt at all newspaper companies. At midyear that was $14 billion for the publicly traded players (excluding News Corp., which only owns two U.S. newspapers, but more on them later), $12.5 billion for the Tribune Co., plus more for other private players. The U.S. may take equity stakes in all companies, should the government deem this wise. This plan also includes a onetime sum to offset current revenue shortfalls. Newspapers took in $45 billion from advertising in '07; let's assume ad declines this year and next will total $15 billion. Cost: Around $45 billion.
Industry Digitization. Think of the "license fee" British households pay to the BBC. Government will subsidize Amazon's (AMZN) Kindle (or equivalent device) and mandate that each household purchase one for $50. (Households below the poverty line will get one free.) This plan also provides several billion dollars to develop new digital news products, retrofit or dispose of obsolete assets (like printing presses), and roughly maintain existing newsroom staffs. Government again has the option to secure passive equity stakes. We will stress this plan's "green" aspects. Cost: Approximately $55 billion.
To paraphrase incoming Chief of Staff Rahm Emanuel, never let a crisis go to waste—it allows you to do big things. Tongue & Cheek can guide the lobbying push essential for our mutual success, but we will require the participation of industry leaders who can navigate Washington with finesse and charm. In other words: Sam Zell, please stay home and tend to Tribune. (By the way, Tongue & Cheek has cultivated News Corp. (NWS) executives. Having Rupert Murdoch on board will defang those who howl about liberal media bias.)
Should our proposals fail, we can still shake loose much low-hanging fruit. For starters, a special—and substantial—tax credit for daily newspapers, given our "educational" rebranding. Consumers' subscriptions will win tax-deductible status as well. I'm less certain than some of you that lifting laws preventing newspapers from owning radio or TV stations in the same market will fatten bottom lines. But here, too, a persuasion campaign can reap benefits.
I recognize some may perceive all this as an admission of defeat. But let's feel a sense of opportunity, not shame. And always remember how your business differs from the other supplicants. No newspaper ever bankrupted a country or peddled a product as patently putrid as the Pontiac Aztek.
Fine is BusinessWeek's MediaCentric columnist and Fine On Media blogger .

Meanwhile, how are those stocks doing?

Er, not too good. As of about 20 mintutes ago, here's the story.

New York Times Co
(NYT:NYQ) NYT on other Exchanges
7.49 USD Last
-0.47 -5.90% Change
687.4K Below Average Volume

Data as of November 14, 2008 13:27 exchange time. Market data is delayed by at least 20 minutes

That would be a 20% drop this week, with a low of $7.33 and a low of $7.44 this week. If there's ever a time to do this, it's now.

It's not a strategy for survival, it's not a business plan, even as a non-profit making foundation funded newspaper, but it would buy some much needed time for someone, please someone to come up with some ideas.

This ad recession is going to go into 2010, no doubt about it, and that means 2 years of agencies and clients finding cheaper and cheaper alternatives that work. I don't think there is a lender out there right now with that much patience or risk carefree.

People are talking about GM going bankcrupt. Well, wait till you see the Q4 earnings, then the 2009 Q1 and Q2 and need I go on......

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What Will Replace Big-City Newspapers? (Businessweek)

Yet more drip feed on the death of newspapers. You begin to get a handle, when you follow these stories, on just how many there are, and wonder what the impact is on the advertisers and consumers. If somebody tells you day in and day out the bread you're eating is stale, do you stop buying it?

We are at a tipping point, and I think newspaper decline could happen much, much faster than anyone realizes, at least among younger readers. Glasnost, Berlin Wall, goodbye.

Just a thought.

What Will Replace Big-City Newspapers?
After they die, local TV will benefit—but probably no one else

The warnings and elegies for the big-city newspaper have been done to the point of exhaustion, and I don't want to beat a breaking-down horse of a medium that I actually like. But the picture keeps worsening. Yearly ad falloffs at many such places are accelerating past 15%. At sundry recent points I've mistaken some twitch in the data for a market bottom, and each time I've had newspaper executives tell me I'm completely wrong. It's now time to start considering what was once unthinkable: the post-newspaper media economy in our nation's cities.
Oh, O.K., fine, big-city dailies are not all going away tomorrow. And I'm not talking about newspapers in smaller towns or national dailies à la The Wall Street Journal or The New York Times. (While hardly immune to problems, both types face less gruesome environments.) But the big-city guys are shrinking, and quickly, in head count, revenue, and ambition. Executives have admitted that some papers may not publish on certain days of the week. McClatchy (MNI), which has a portfolio weighted to metro dailies, cut 1,400 jobs beginning in June and just announced plans to drop 1,150 more—and this comes after the company had already cut 13% of its mid-2006 head count. Family owners are throwing up their hands, hanging out For Sale signs on major newspapers amidst the worst selling environment in, perhaps, ever. ("If there was someone who wanted to buy newspapers and would pay a decent price, they could buy a lot," admits one executive familiar with media markets.) And remember: All these gears were in motion long before the current financial crisis hit.
So who would profit from a disappearing newspaper? Local TV and cable, for starters. The city daily is still the biggest single media entity in virtually any market. Its main pitch to advertisers is brutally simple: We have more craniums to dent with your message than anyone else. After newspapers, TV "is the last mass-branding medium," says Gordon Borrell, CEO of local-media research firm Borrell Associates, and thus will snap up dollars that would have been newspapers'. And, while '08 will be lousy for local TV, no one expects any major stations to fall off the dial anytime soon.
In the largest and most affluent cities—Los Angeles, San Francisco, New York, Chicago, Houston—look for the decline of the newspaper to strengthen the lighter-than-air free upscale glossy monthlies. For good or ill, the vacuous expanses of the likes of Niche Media's Gotham and Los Angeles Confidential, which are assembled with a very gentle hand for the very rich (or those who like to gawk at them), are well-positioned to suck up additional business from high-end retailers. I'd be more convinced that highly targeted variations of these magazines—like those aimed at local brides—would also flourish in a post-newspaper world, had informed executives not doubted there's enough local dollars for such entities.
Which brings me to a disquieting conclusion. The obvious venues for all this displaced journalistic energy are a gazillion new independent online endeavors, be they individual blogs or bigger efforts like MinnPost.com. They will make for fascinating media ecosystems within individual cities, and some will become hits. It is much less certain whether ad dollars will follow. Ultracheap classifieds site craigslist has simply "destroyed revenue," says Dave Morgan, a former newspaper executive who founded behavioral targeting firm Tacoda, and revenue that no longer exists won't shift to new ventures. Others point out that key newspaper advertisers—local auto dealers and realtors, say—already have many outlets for ads online, not least of which are their own Web sites or national sites such as Cars.com that serve up targeted ads.
For those sensing untapped riches in ads from pizzerias and dry cleaners, well, good luck, says Borrell. "Local is a very unorganized and dirty business," he says. "People look at local as this one-ton gorilla, but in fact it's 2,000 one-pound monkeys." And no publisher can afford to sit down with a city's 2,000 small fry to sell each a $50 ad. The bitterest pill of all for newspaper denizens is that, while nature abhors a vacuum and all that, in this case there may not even be one left to fill.
For Jon Fine's blog on media and advertising, go to businessweek.com/innovate/FineOnMedia

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Online Ad Slowdown Looms (Businessweek)

Online Ad Slowdown Looms
The financial crisis on Wall Street will spill over into the world of online advertising as banks and brokerage firms cut spending
Internet September 23, 2008, 12:01AM EST

Online marketers are converging on New York for the ad industry's annual conference, where they'll hold discussions on everything from tracking online brand buzz to using humor to lure a Web-surfing audience. But perhaps the most pressing topic for attendees of the Advertising Week V conference in Manhattan is the financial crisis gripping Wall Street and what it means for their business, especially on the Web.
Companies dependent on Internet-based advertising are bracing for a slowdown as financial-service companies cut ad budgets. "The first six months of the next year will be slow," says Russell Fradin, president of Adify, a company that helps firms set up online advertising networks.
When budgets are tight, advertisers tend to look for proven methods, such as ads placed alongside a Google (GOOG) or Yahoo (YHOO) search, and place less empasis on experimental venues, such as social networks, experts say. "Mobile and social networks will be hit," Fradin says. It's harder to prove that ads placed on a social network or embedded in a video are effective in luring Web surfers to a site or enticing them to make a purchase. Matt Sanchez, CEO of online video advertising network Video Egg, says he expects growth to slow in the coming 12 months. He expects that some smaller, less well-funded video ad and ad targeting firms will have difficulty sustaining their businesses. "The next 12 months will be tough," he says.
"Real Measurement" of Ad Spending
Even before the financial market malaise took a turn for the worse with the bankruptcy of Lehman Brothers, Bank of America's (BAC) purchase of Merrill Lynch (MER), and the government bailout of AIG (AIG), researchers were cutting back online advertising forecasts. In August, research firm eMarketer cut projections for Internet ad spending this year to $24.9 billion, the second revision of estimates first released in October. The firm expects Internet advertising growth to slow to 17.4% this year fom 25.6% in 2007. Next year, growth will slow even more, to 14.5%. "Online advertising will not grow as fast because of the economic problems," eMarketer senior analyst David Hallerman says.
Even as some financial-services companies, including AIG, have cut back on or pulled television ads, some in the sector have stepped up campaigns in recent weeks to quell concerns they're burdened with bad debt or are otherwise at risk, Hallerman adds.
Some major brands are also likely to deal with the dour economic outlook by increasing spending in highly measurable online areas that are tied directly to sales, such as search ads. The expectation is that search advertising won't suffer as much as so-called display advertising, which includes banner ads emblazoned on a page. This form of advertising is often designed to increase brand awareness or change perceptions, rather than drive sales directly. "In difficult economic times, marketers and advertisers want to have real measurement of the dollars they are spending," says David Doty, senior vice-president of marketing at the Interactive Advertising Bureau.
Executives at Unilever (UN), one of the most active online marketing brands, say they will not cut back on online spending, even with such new ad formats as Web video and online games. "We are not pulling in the reins at all," says Keith Bobier, Unilever's senior director of marketing. "There is nothing experimental about this for us."
But the feeling among many Web advertising firms is that Unilever is the exception to the rule. Many other marketers still see portions of their online ad budgets as "experimental." "If a certain kind of spending hasn't been in your [advertising] budget for three straight years, you'll likely cut it when things get tougher," says Adify's Fradin. "Anyone who is new will have slow growth."
Holahan is a writer for BusinessWeek.com in New York. With Heather Green in New York
http://www.businessweek.com/technology/content/sep2008/tc20080922_251923.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis




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