On Mon, Feb 23, 2009 at 11:13 AM, Michael Pollak <mpollak at panix.com> wrote:
>
> http://www.theatlantic.com/doc/200901/new-york-times
>
> January/February 2009
> The Atlantic
>
> Can America's paper of record survive the death of newsprint? Can
> journalism?
>
> End Times
> by Michael Hirschorn
>
> 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
> The New 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."
>
> Full at:
> http://www.theatlantic.com/doc/200901/new-york-times
>
> Michael
>
> ___________________________________
> http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
>