By Greg Michael
The New York Times plans to narrow the size of its flagship newspaper and close a printing plant, resulting in the loss of 250 jobs, in a move to stop the decline of its stock value and keep major shareholders from a revolt or from bolting altogether.
The changes are still a way off, why report that now?
It may be because The Times will be reporting some mediocre financials in the next day or two. This tidbit on the lowly production job cuts are meant as red meat for shareholders. The cuts are planned to take place in April 2008, including the closure of a printing plant in Edison, New Jersey. The company will consolidate its regional printing facilities at a plant in Queens. The newspaper will be narrower by 1 1/2 inches. Some of their loyal high-end advertisers will wonder why they are paying the same rates or even more for a smaller space, but most of the ad agencies are used to the new format. USA Today has used that slim format for more than a decade.
The New York Times reports it expects the changes to result in savings of $42 million (over what time frame? Is this proper disclosure under Sarbanes-Oxley?).
The narrower format will reduce the space the paper has for news by five percent, Executive Editor Bill Keller said in an online article (Is that all Mr. Keller? What about the space for the advertisers who help pay for your summer home in the Hamptons?)
Actaully, the Times was one of the last holdouts on the standard, slimmer format. The Times will in two years, join with most major papers that made the switch several years ago, including The Washington Post, San Francisco Chronicle, Houston Chronicle, Chicago Tribune and LA Times. They have reduced their size as they cut newsprint and other production costs and try to stem the continual loss of readers and advertising to the Internet and other media.
Years late and several million dollars short in making the change, due to an editor-centric management culture unique to The Times, rather than a business-led organization.
Imagine if Disney would let artists run the company and own all shareholder voting rights. Goofy management decisions. The Times has created the two-tiered stock scheme with voting rights preserved for a small inner-circle of family members and elite editors. The lion’s share of stockhoders are just happy little dwarfs.
Another chief indicator was reported, that Times Chief Financial Officer Leonard Forman will retire in 2007 after the company names a successor. (He’d leave for the Hamptons today, if he could).
Getting out while the getting is good
Forman was president of The New York Times Magazine Group from 1998 until it was sold in 2001. Analysts believe Forman was in charge of cleaning up the books and window dressing the magazines that were sold at about the same time that the Santa Barbara paper was sold.
The Gray Lady doesn’t have much more to lose.