Financial woes humble New York Times

January 6, 2009
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, NEW YORK, January  6 – The cash-strapped New York Times put up for sale on Monday its most treasured piece of property.

After staff cuts, page reductions, and plans to remortgage the gleaming Manhattan headquarters, the daily has now opened its editorial holy of holies to advertising.

The maiden ad, a color banner display for CBS television across the bottom of the page, might seem innocuous. But it reflects troubling economic times in the battered US newspaper industry.

The daily described the invasion of advertising into the once sacrosanct page as "the latest concession to the worst revenue slide since the Depression."

Such a move had been resisted "by traditionalists as commercial incursion into the most important news space in the paper," the article in the Times\’ business pages added.

Dubbed the "Grey Lady" for its staid, but serious approach to news, the Times occupies a rarified place in journalism.

But its problems — the growing effect of the recession on advertising and the defection of both advertisers and readers to Internet sites — are those plaguing an entire industry.

"The business model of The New York Times and all the other major newspapers is past its day," said New York University communications professor Mark Crispin Miller.

Media blogs are full of rumors about the Times sliding toward a similar fate to the rival Tribune company, owner of The Los Angeles Times, which declared bankruptcy in December.

Advertising revenue for the New York Times Media Group, which also includes The International Herald Tribune, fell 21.2 percent in November last year compared to the same month in 2008.

Now 2009 promises even more trouble, with a 400 million credit facility expiring in May.

The New York Times Co. has announced plans to raise up to 225 million dollars by borrowing against its Manhattan skyscraper headquarters and is also reported to be looking to sell its stake in the Boston Red Sox baseball club.

Analysts believe the Times will get through, but not without a brutal fight that many other US newspapers will not survive.

"Newspapers are going through a very difficult transition period now. Circulation is off, advertising is way off … It\’s changes in people\’s media habits. The newspaper habit isn\’t a strong as it used to be," said Paul Janensch, journalism professor at Quinnipiac University.

However he pointed out that newspapers had survived other technological upheavals, like the advent of radio and television, and would adapt to the Internet age — possibly by becoming more opinion-orientated.

Given the desperate situation there have been calls for government aid, despite the obvious potential for conflict of interest.

A Connecticut lawmaker, Frank Nicastro, caught attention this month when he urged measures to save two local newspapers in the state — The Bristol Press and The Herald.

Christopher Simpson, professor of communications at American University, said local newspapers are especially vulnerable.

He highlighted the "substantial social problem" in a mountainous area of Virginia, where radio and television reception are poor, and only one weekly newspaper remains. "Access to news is getting closer and closer to zero."

However, newspapers\’ long tradition of independence here means that unlike banks and carmakers, they will probably be left to fend for themselves, Simpson said.

"I\’d be very surprised if there were bailouts for newspapers in the US. This cuts too much against the grain."

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