June 14, 2007
New York Times slo-mo business collapse
The business model he established for the New York Times Company continues to collapse under the feet of Pinch Sulzberger. The very latest revenue figures of the company released just minutes ago show that advertising revenue and gross revenue are declining at a rate that cannot be matched by growth in revenues from the expensive internet properties purchased by Sulzberger. Here is the data:
NY Times May ad rev at NY Times Media Group off 9.1%
NY Times May Internet ad revenue up 21.4%
NY Times May ad revenue off 8.5%, total revenue off 5.8%
Internet revenue growth was able to absorb roughly a third of the decline in the rest of the media properties, including the flagship NYT and other smaller papers (which are generally healthier monopolies than big city dailies, especially those with competition).
A six percent decline in revenue over a year is a serious signal for any company. For the New York Times Company, it demonstrates that the ship is still taking on water, and is listing, with the wet newsprint business outweighing the dry but small internet segment grafted onto the company.
To switch metaphors, this is a slow-motion business collapse, with the foundations crumbling faster than the the new shoring-up measures can match.
Having jettisoned the profitable broadcast station group, which provided high profit margins, there now is less revenue counterweight to mask the decline in newsprint revenue.
It may be a tough day for NYT stock. In the first few minutes of trading, it is down just under 2%.
Hat tip: Ed Lasky