UPDATE: The New York Times may not exist as we know it this year or next. The crash is happening faster than any of the experts had predicted.
This article has been mentioned on Silicon Alley Insider.
End Times
Virtually all the predictions about the death of old media have assumed a comfortingly long time frame for the end of print—the moment when, amid a panoply of flashing lights, press conferences, and elegiac reminiscences, the newspaper presses stop rolling and news goes entirely digital. Most of these scenarios assume a gradual crossing-over, almost like the migration of dunes, as behaviors change, paradigms shift, and the digital future heaves fully into view. The thinking goes that the existing brands—The New York Times, The Washington Post, The Wall Street Journal—will be the ones making that transition, challenged but still dominant as sources of original reporting.
But what if the old media dies much more quickly? What if a hurricane comes along and obliterates the dunes entirely? Specifically, what if TheNew York Times goes out of business—like, this May?
It’s certainly plausible. Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good.
“As part of our analysis of our uses of cash, we are evaluating future financing arrangements,” the Times Company announced blandly in October, referring to the crunch it will face in May. “Based on the conversations we have had with lenders, we expect that we will be able to manage our debt and credit obligations as they mature.” This prompted Henry Blodget, whose Web site, Silicon Alley Insider, has offered the smartest ongoing analysis of the company’s travails, to write: “‘We expect that we will be able to manage’? Translation: There’s a possibility that we won’t be able to manage.”
The paper’s credit crisis comes against a backdrop of ongoing and accelerating drops in circulation, massive cutbacks in advertising revenue, and the worst economic climate in almost 80 years. As of December, its stock had fallen so far that the entire company could theoretically be had for about $1 billion. The former Times executive editor Abe Rosenthal often said he couldn’t imagine a world without The Times. Perhaps we should start.
Granted, the odds that The Times will cease to exist entirely come May are relatively slim. Many steps could be taken to prolong its existence. The Times Company has already slashed its dividend, a major source of income for the paper’s owners, the Sulzberger family, but one that starved the company at precisely the moment it needed significant investments in new media. The company could sell its share of the brilliant Renzo Piano–designed headquarters—which cost the company about $600million to build and was completed in 2007, years after the digital threat to The Times’ core business had become clear. (It’s already borrowing money against the building’s value.) It could sell The Boston Globe—or shutter it entirely, given what the company itself has acknowledged is a challenging time for the sale of media properties. It could sell its share in the Boston Red Sox, close or sell various smaller properties, or off-load About.com, the resolutely unglamorous Web purchase that has been virtually the only source of earnings growth in the Times Company’s portfolio. With these steps, or after them, would come mass staffing cuts, no matter that the executive editor, Bill Keller, promised otherwise.
It’s possible that a David Geffen, Michael Bloomberg, or Carlos Slim would purchase The Times as a trophy property and spare the company some of this pain. Even Rupert Murdoch, after overpaying wildly for The Wall Street Journal, seems to be tempted by the prospect of adding The Times to his portfolio. But the experiences of Sam Zell, who must be ruing the day he waded into the waking nightmare that is the now-bankrupt Tribune Company, would surely temper the enthusiasm of all but the most arrogant of plutocrats. (And as global economies tumble around them, the plutocrats aren’t as plutocratic as they used to be.) Alternatively, Google or Microsoft or even CBS could purchase The Times on the cheap, strip it for parts, and turn it into a content mill to goose its own page views.
Regardless of what happens over the next few months, The Times is destined for significant and traumatic change. At some point soon—sooner than most of us think—the print edition, and with it The Times as we know it, will no longer exist. And it will likely have plenty of company. In December, the Fitch Ratings service, which monitors the health of media companies, predicted a widespread newspaper die-off: “Fitch believes more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010.” — Michael Hirschorn.
In a effort to retain their crown as the liberal beacon of Western Civilization, the old gray lady, The New York Times, found that not only its circulation, advertising and stock price are falling, now their editorial authority is irrelevant. Obama is crushing the Hillary Clinton machine and the massive coverup of voter fraud in New York and New Hampshire can’t be kept behind closed doors. Not only are some leaders in the Democrat party pointing out the voter fraud, the liberal mayor of New York City, Michael Bloomberg called it exactly that. What does The Times do?
Instead they print a smear job on the front page, attacking the Republican candidate, Sen. John McCain.
White House Spokesman Scott Stanzel told reporters that he and others working in the Bush administration felt the influential newspaper had a history of going after Republican presidential candidates.
“I think a lot of people here in this building with experience in a couple campaigns have grown accustomed to the fact that during the course of a campaign, about — seemingly on maybe a monthly basis leading up to the convention, maybe a weekly basis after that, The New York Times does try to drop a bombshell on the Republican nominee,” Stanzel told reporters.
Stanzel also said the newspaper sometimes makes “incredible leaps to try to drop those bombshells on the Republican nominees.”
It’s too late. The bombshell didn’t work this time. The truth is spreading via blogs. And it is too late for The Times to jump on the Obama band wagon, just yet. The editors are thinking ahead. They know that they will have to switch their support to the Democrat front runner in the next few weeks, graciously dropping Hillary. They have a first look at the poll results for Clinton and she is losing in Texas and Mississippi, big time it appears.
So, in a last ditch effort, the NYT’s editors drop a bomb on McCain. They even endorsed the moderate war hero a few weeks ago. Take a look at the affair they are reporting that McCain had with Vicki Iseman. Who are the sources? What does Ms. Iseman have to say?
Why didn’t they do that kind of reporting on Bill Clinton? First, before he was elected, but more importantly, when he was being serviced by a young intern in the oval office? The Internet has toppled the elite liberal media in 2008. I predict the NYT stock price to fall below $15 in the coming weeks.
The end of elite liberal media empires and rise of citizen journalism 