NY Times in trouble: advertising down 16%, may struggle to service debt
The New York Times released their 3rd quarter results today, adding to the doom and gloom in the newspaper market with declining advertising and debt issues.
The company reported 3rd quarter net income of $6.5 million, compared to $13.4 million for the same period last year.
Advertising declined 16% in the quarter after reporting an 11% fall for the first half of the year. Print advertising took the biggest hit with an 18.3% fall for the quarter, with classified advertising down 28%. Online advertising was up 10.2% off an increase of 16% at about.com, but the online gains were not enough to offset the decline in print, with online advertising making up 12.4% of advertising revenue for the company, but up from 10.6% for the same time last year.
The bright news is that the decline in advertising slowed in September, hitting 14.1% for the month vs 15.9% August and nearly 18% in July.
The NY Times’ exposure to debt may cause serious issues for the company, with Moody’s Investor Service placing the company on review, the first step towards a downgrade of NY Times’ debt status to what the WSJ referred to as “junk territory.” The company confirmed issues with servicing their existing debt of $1.1 billion with only $46 million cash at hand. Henry Blogdet has more here.