Alarms Going Off @ The New York Times

If we could wind back the clock to last spring, critics and dissident shareholders were practically begging The New York Times Co. to shed non-essential assets, and cut back on its print operations, while investing in Internet properties. For reasons known only to them, the company’s insular management team resisted all these steps, as if they somehow knew better than the chorus outsiders what was best for their company.

And herein lies one key to this company’s monumental fall from grace — it was never their company, it is a publicly-traded company, listed (for now) as part the Dow Jones Industrial Average on the New York Stock Exchange. It has long been using our money, since through mutual funds most of us are — or have been — investors, whether we realized it or not.

So, during a time when most of are hunkering down for the holidays, look at all the headlines this week about the Times:

•  New York Times Nov. ad revenue drops 20.9 percent   
• New York Times Reportedly Shopping Red Sox Stake; Looking For $200 Million In Tough Market?
• Is the NY Times the Canary in the Online Ad Coalmine? 
• NYTCo. - A November to Forget
• UPDATE - New York Times Co November ad revenue falls 20 pct
• NYT’s November Revenues: Bleed is Still On

Okay, so some of these are redundant, but their screeching tone cannot be ignored. Investors certainly are getting the point, as when the market closed early on Christmas Eve, shares in the Times had fallen another 5+ percent to close at an even $6/share. The stock market was already worried about the timing of decision by management to put its headquarters building in midtown Manhattan on the commercial real estate market at a time when there is no commercial real estate market!

Credit is frozen; property is not moving. When it does, the bottom seekers will be the first to enter it, so depending how desperate the Times is to meet its debt obligations, it may be forced to a fire-sale sales and/or lease deal. All of the other assets — the Boston properties (newspapers, real estate, a piece of the baseball team) are precisely the assets (along with the building) that outsiders were asking to be dealt away long ago.

Buying high and selling cheap is never a preferred scenario in business except in one case — when you are fighting for your life. After studying the Q-3 financials for the Times, my colleague Jim Edwards suggests that “if the Times wants to stay profitable it ought to consider laying off hundreds more of its staff.”

Oh yeah, Happy Holidays. (From this grouchy old media Grinch.)