New York Times Co. fell the most in almost 22 years in U.S. trading after reporting a 27 percent drop in first-quarter advertising revenue and saying that the rate of decline won’t slow until at least the second half.
The net loss expanded to $74.5 million, or 52 cents a share, from $335,000 a year earlier, the newspaper publisher said today in a statement. Sales fell 19 percent to $609 million, trailing the $634.3 million average of four analysts’ estimates compiled by Bloomberg.
Times Co. cut jobs, slashed pay, halted its dividend and sold assets to help preserve cash after ad revenue slipped 13 percent last year. It’s seeking to sell its minority stake in the Boston Red Sox baseball team and is negotiating additional pay and job cuts with unions.
“It’s clear from these results that it’s a very, very bad environment for newspapers,” Edward Atorino, a New York-based analyst at Benchmark Co., said in an interview. “There’s no sign of relief.”
Atorino, who recommends holding the shares, estimated ad sales may fall 18 percent in the second quarter.
Some of this is inevitable in a falling economy. Rather a lot of this is self-inflicted. The Times has willfully decided to alienate about half of its potential readership with its blatant leftward skew. In a falling economy, this business strategy has a short, handy nickname:
Here’s a suggestion for the Times, as if they would listen and if it is already not too late: Try playing it straight with the news. Try not to trill and coo over the Obama administration and call them out with the same vehemence you did to Republicans. Try setting the exact same standards in your reporting on either party, in power or out.
Try playing center field instead of camping on the left field line.
The results might surprise you. It certainly could not be a worse strategy than you have working at the moment.
If it isn’t already too late.