socialmedian: New York Times (NYT) Running On Fumes

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Submitted by Hutch from Google Reader

Oct 23, 2008

Summary

Not sure how it came to this so fast, but the New York Times (NYT) is running on fumes. This situation will only get worse as advertising revenue continues to fall.

The company has only $46 million of cash. It appears to be burning more that it is taking in--and plugging the hole with debt. Specifically, it is funding operations by rolling over short-term loans (yes, the kind that banks worldwide are cancelling to save their own skins):

At the end of the quarter, cash and cash equivalents were approximately $46 million and total debt was approximately $1.1 billion. The Company's current source of short-term funding is its revolving credit agreements under which it had approximately $398 million in borrowings outstanding at the end of the quarter.

The company did not publish a balance sheet or cash flow statement when it released its (awful) preliminary Q3 results this morning, so we don't have any cash-flow details. As best we can tell from the income statement detail, however, this is the situation:

The company's EBITDA from its news

...Read the full article

Comments (13)

Hutch,

Oct 23, 2008

"So that's why the company raised the possibility this morning that it might default on its debt." >> Say what???

Michaelfidler,

Oct 23, 2008

@hutch I hope Hollywood is paying closes attention to this, before they begin down the same path of overspending that brought the Times to their knees. What sucks about this is, the Times has a wonder site. A friend of mine went as far as calling it a destination.

Hutch,

Oct 23, 2008

I love the NYT as well. They do such a good job with explaining the news and giving it context. Hope this is just a blip.

Thomaspower,

Oct 24, 2008

Is the NYT going down?

Joannedevault,

Oct 24, 2008

"The company has only $46 million of cash." oh poor poor new york times:(. im aching for you.

Jasongoldberg,

Oct 24, 2008

@joannedevault The company has $1.1B in debt, is barely making any money, and has very little cash reserves and no one wants to lend it money. That $46M in cash is pennies compared to what it takes to run the NYTimes.

Michaelfidler,

Oct 24, 2008

@jasongoldberg I'm shocked also. the Times is an institution, and nobody wants to help. It's not like it's a content problem. They need some cash and new management, and they might get through this.

Hutch,

Oct 24, 2008

It's shocking how badly newspapers are getting slammed right now. I'm a big NYT fan, there's too much brand equity and readership there for it not to survive. Maybe a big equity infusion from some firm in the offing?

Jasongoldberg,

Oct 24, 2008

@hutch @michaelfidler the problem is the business model. It is no longer a good business to print and deliver papers that fewer and fewer people subscribe to and fewer and fewer advertisers want to promote it.

Hutch,

Oct 24, 2008

Rob Diana wrote about this very issue - his point is that newspaper can have a great future via RSS: http://www.socialmedian.com/story/1372233/newspapers-rss-for-the-mainstream-user

Michaelfidler,

Oct 24, 2008

@jasongoldberg Last week I read an article here(if I could find the article:hint), which focused on the Times and how they are losing a fortune online. Thus my previous statement re: Hollywood taking note of the situation. The article mentions Hollywood briefly, but it was really about how media companies need to be cautious when they move online. The Times was an example of what a company should not do. The print model no longer being viable is a given.

Michaelfidler,

Oct 24, 2008

@hutch That is a great article!

Michaelfidler,

Dec 01, 2008

Well there still afloat. I was thinking about this the other day, i glad someone clipped it. I actually try to use it more often than I have. Just, doing my tiny part to keep them alive!