Newsprint demand down but will there be Play on newsprint prices?

It just isn't getting any better is it?

September 07-September 08, U.S newsprint demand went down 13%, newsprint prices went up 13%. That's the real number to worry about for the IHT because my understanding is that IHT newsprint is bought off the back of the higher NYT newsprint purchases. But in Europe the price gets worse too. As does demand.


Newspapers face fresh printing pressures (FT)
By Robert Anderson in Stockholm and Christopher Mason in Ottawa
Published: November 16 2008 17:30 Last updated: November 16 2008 17:30
Newspapers, which are already bracing themselves for falling advertising sales as the global economy turns down, face more bad news next year as newsprint producers try to push through steep price increases.
European newsprint producers led by Norske Skog, the world’s second-largest, are currently negotiating with customers to increase prices by up to 20 per cent.
They believe that recent capacity cuts have given them the market power to compensate for years of rising costs, flat prices and falling margins.
“We’ve been under quite a drastic margin squeeze for several years,” said Norske Skog’s spokesman. “We see a momentum now for increased prices.”
All of Europe’s big newsprint producers are currently lossmaking as demand continues to fall because of the switchover to internet publication, while wood, energy and transport costs have risen significantly.
European producers have responded this year by committing to cut some 1m tones of capacity – 6 per cent of the total, according to Norske Skog, double the 3 per cent fall in demand.
As cost pressures start to ease, this gives producers a shot at raising margins.
“In Europe we will see the biggest changes, as we’ve had constant overcapacity for several years,” Norske Skog says.
European producers are also benefiting from a fall in imported newsprint as North American producers turn back to their home markets.
North American producers have suffered even more from falling demand, as the switch to the internet has taken hold faster there, but they have also been quicker to consolidate and cut capacity. In the year to September North American newsprint prices soared 33 per cent while consumption continued its descent, falling nearly 13 per cent over the same period.
North American Newsprint producers AbitibiBowater, Catalyst Paper, and Tembec initially compensated for drops in domestic demand by exporting to western Europe, Latin America and Asia.
But the strengthening dollar and the steep rise in North American newsprint prices have swept away European price advantages.
In the first nine months of 2008, newsprint exports to western Europe fell 20.6 per cent from the same period last year, according to the Montreal-based Pulp and Paper Products Council. Exports to Latin America and Asia grew by 17 and 9.3 per cent respectively in the same period, reflecting producers’ efforts to seek out new growth markets.
Analysts remain doubtful, however, whether newsprint producers will be able to push through the price increases in full without more capacity cuts.
“If [North American] producers don’t come out and shut down more capacity, it looks like prices will peak at the end of this year,” said Rahul Gandhi, a New York-based paper analyst with CreditSights.
“The decline in demand though will not stop, so it’s not looking good for producers if they are unable to raise prices.”
“There is a possibility that [European] prices will go up but demand will also go down,” says Johnson Imode of Standard & Poor’s Equity Research in London. “Clients will be able to strike quite a hard bargain with newsprint manufacturers.”
http://www.ft.com/cms/s/0/a2cac4b2-b400-11dd-8e35-0000779fd18c.html?nclick_check=1


More housekeeping at the Harbinger (of doom) announced - what exactly is going on there I couldn't tell you - but equity swaps reported at around the $15.00 mark - and the NYT Company share price slips yet further.

I said $10 would be a tipping point, we got there shortly thereafter, and we have tipped. How that re-scheduling of borrowing is going I wouldn't like to say but this is beginning to look a lot like GM. Citibank cut another 24,000 jobs yesterday, taking it to 20% of its workforce, and short of the NYT doing something similar, I can't see a turn around anytime soon.

Even if 2010 (end thereof at best, I might add) sees us come out of the advertising recession, I fear that's too far off for the NYT. Advertisers by then may just have given up on print.

Yesterday, the NYT shuttered its award winning mag PLAY having said it would keep 4 issues in 2009, so there you go.

Talk was up about Play as recently as last October (as was talk of no layoffs) but according to an email to Fishbowl NY, from Play editor Mark Bryant, "The company needs to make some pretty considerable cuts going forward."

There's an understatement.

"It was on the schedule. It was in the budget," Bryant wrote when asked "why the magazine had been shuttered so soon after both he and the Times brass confirmed it would continue next year".

According to Bryant, Play wasn't losing money. "I'm am told that last year we more or less broke even, thanks largely to the Nielsen deal for the Olympic issue," he wrote. ('Nielsen bought out the entire issue. It was, according to Bryant, the "largest single day sale in the history of The New York Times".)

Et alors? More or less break even, even with the single day sale in the history of the NYT. Says it all.

Share price now: $7.10 on a day that hit a low yesterday of, yes, $7.

That's 47% down on three months, 61% down on 1 year. Not that anyone's counting or anything.

Anyone want to buy a GM SUV? But where's print's Toyota Prius? It's hard to find a media outlet, print or Internet, that isn't hacking staff off as fast as it can, and one can't help wondering when this option is put into Play at the NYT.

I still fancy a 'go-private' move - hard pressed to see an alternative; hope there are some rich people who couldn't live without their NYT.

The family could sell some voting stock to Harbinger/The Mexican Gunslinger to get that debt down, but what would be the implications of that? Very ugly.

New York Times Co
(NYT:NYQ) NYT on other Exchanges
7.10 USD Last
-0.24 -3.27% Change
1.3M Below Average Volume

Data as of November 17, 2008 16:04 exchange time. Market data is delayed by at least 20 minutes

Vanity Publisher to Acquire the International Herald Tribune (perhaps)

Over the years, the one perenial conversation about the International Herald Tribune and its ownership is that one day it would be sold to a very rich vanity publisher, as and when the NYT gave up on our lovely paper.

So, it was not without some interest that this article from E&P caught my attention:

Slim's $123 Million Bet on the Future of The NYT Co.
By Mark Fitzgerald Published: September 10, 2008 9:45 PM ET
CHICAGO Carlos Slim Helu, who is, depending on who's counting, either the second or third richest man in the world, is most famous for assembling monopoly-like enterprises in Mexico, such as the Telmex telecommunications juggernaut.But there are two other things the U.S. newspaper industry should know about Slim, now that he and his family trust have in one fell swoop scooped up 6.4% of The New York Times Co.First, Slim has a nearly unerring eye for distressed companies that later deliver huge returns. Again, the most famous are Mexican companies such as Seguros de Mexico. He bought the nation's largest insurance company in 1982, when economic and political disarray caused by a collapsing oil price and government currency mismanagement looked to send Mexico back into basket case status. He paid $44 million for Seguros. Last year, The Wall Street Journal estimated it was worth "at least $2.5 billion."But as the Journal, in an August 2007 profile by David Luhnow, also noted that Midas touch can extend into El Norte as well. "From 2002 to 2004, he amassed a 13% stake in bankrupt carrier MCI, later selling it to Verizon Communications Corp. for $1.3 billion," Luhnow wrote. "He has never overpaid for anything," the article quotes a friend as saying.The second thing to know about Slim is that he's a fan and a disciple of the pop futurist Alvin Toffler. What he likes about the "Future Shock" author, he told the Journal, is his concept of identifying opportunities early.Slim's history suggests that he sees in the Times Co. something Wall Street is missing.The New York Times is undoubtedly the world's best newspaper franchise, and arguably the best franchise in news, period, yet its parent's stock price (NYSE: NYT) is trading at the lower end of its 52-week range of $12.08 to $21.14. Wednesday's closing price of $13.96 is nearly identical for its average closing price for October 1996, $13.68.There are reasons for that stock slump, of course, ranging from the cyclical economic downturn to the long-term migration of information and advertising to the Internet. And the Times Co. has the particular burden right now of publishing metro dailies in two especially harsh markets: Boston and Florida.Slim's SEC disclosure says the trust purchase was made Sept. 4, making it an approximately $123 million bet on the Times Co. There's no indication that Slim will be the kind of activist shareholder at Times Co. as the Harbinger Capital Partner/Firebrand combine has been with its purchase of about a one-fifth stake of the company's common stock.Instead, he appears content, for now anyway, to make the bet and see if the "Future Shock" in his first-ever venture into newspaper publishing is a pleasant or distressing one.
http://www.editorandpublisher.com:80/eandp/news/article_display.jsp?vnu_content_id=1003848847




A PLACE IN THE AUVERGNE

International Herald Tribune
IHT
New York Times
NYT

Vacation /Business Trip Furnished Apartment in Paris