If things weren't bad already for the New York Times Co., credit rating agency Standard & Poor's issued another body blow, lowering its debt rating on the media company to BBB- from BBB. The revised rating is considered one notch above "junk bond" status.
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But some investors have already been clamoring that the Gray Lady hasn't been much more than trash over the last few years and immediate change is necessary. The company's stock price is woeful, and its marquee Sunday edition has tumbled 9.2% to 1.47 million.
The downgrade will just be added ammunition for activist hedge fund minority stakeholders in the Times, Harbinger Capital Partners and Firebrand Partners LLC, to push for more change that may include more deals or more corporate restructuring. Granted the newspaper industry in general is in a major funk, but if the New York Times doesn't do more soon it could go the way of other media companies such as Times Mirror Co., which became a footnote in the history of its acquirer. - Gerald Magpily
See Business week article
See Dealscape: Harbinger wins seats on New York Times' board
See TheDeal.com: Hedge funds lean on the NY Times
