NEW YORK--(BUSINESS WIRE)--The New York Times Company's Board of Directors today voted to suspend the quarterly dividend on the Company's Class A and Class B common stock. In November 2008, the Company reduced the payout level of its fourth-quarter dividend to $.06 per from $.23 per share in the third quarter of 2008.
"Today's decision provides the Company with additional financial flexibility given the current economic environment and the uncertain business outlook," said Arthur Sulzberger, Jr., chairman of the Company. "We have taken decisive steps to reduce capital spending, lower operating costs and re-evaluate our assets. Last month we announced a private financing transaction for $250 million in senior unsecured notes and warrants. We also recently announced that we are exploring the possible sale of our ownership interest in New England Sports Ventures, LLC. We expect the suspension of the dividend, coupled with our other actions, will help us decrease debt and improve the liquidity of the Company, a difficult but prudent measure in this operating environment."
Translation: revenues are tanking even faster than expected (again!), and the company's survival is at stake. The members of the controlling family will have to tighten their belts. They would not permit this move unless it were absolutely necessary.
Barack Obama is talking down the economy, and advertisers, especially purveyors of luxury goods who have used the Times as a showcase, are pulling back sharply. I wonder if anyone at the Times appreciates the irony that the man they supported is undermining the capitalism which created so much wealth on which the Times relies.
Hat tip: Dale Simmons