The last 24 hours may have been bittersweet for staff at the New York Times Co. (NYSE:NYT). While its namesake newspaper won five Pulitzer Prizes on Monday, less than a day later the media company announced a wider-than-expected $74.4 million first-quarter net loss. One of the culprits for the newspaper company's loss was a 27% decrease in advertising revenue. Additionally, the company also had severance costs of $25 million it paid out.
Times will likely remain tough in the months ahead for the Gray Lady. Janet L. Robinson, president and CEO of New York Times, said in a press release:
"We believe the rate of decline in ad revenues in the second quarter will be similar to that of the first. In time, however, we believe that the economy will grow and the advertising market will improve. While we are looking forward to that day, we are not waiting for it."
Look for the media company to continue to lower costs and possibly make more divestments to wait out the economic storm. With almost $1 billion in debt and $294 million in cash equivalents, the company will continue to shop its 17.75% stake in the Boston Red Sox. According to the Boston Herald, the Sox owner has shown interest in buying that minority stake along with the Boston Globe, another Times asset it wants to unload.
With five 2009 Pulitzer Prizes in hand, the Gray Lady has shown its dominance in print journalism, but it offers cold comfort as competition gets smaller. - Gerald Magpily
See NY Times press release
See Pulitzer Prize press release
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NYT made decisions sealing its fate as early as 1995 when it declined buying into Monster.com. NYT was so convinced of its old business model it refused to consider changes, and now the market has shifted leaving NYT uneconomic. Read more at http://www.ThePhoenixPrinciple.com