The New York Times Company put out a press release this morning announcing its earnings. Quite a sad situation, the Grey Lady is dying and if they don’t figure out some massive change there will be some type of forced restructuring.
On the positive side, their internet revenues grew 6.7% to reach $87 million. The bad news, however, is the continued plunge in print advertising which was down by 15.9%. The net result is that overall revenues dropped by 8.9% to $687 million. They have cut costs by 6.7%, but the death spiral continues.
According to Henry Blodget of Silicon Alley Insider they only have $46 million in cash left.
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.
So what should they do? A reporter from ZDNet suggests that they should talk to Yahoo, which might be interesting way for Yahoo to tank further. No, I don’t think that’s the way to go.
What the NY Times needs to do is to start thinking about radical innovation. They need to think so completely differently about their business that they may not be able to do it.
They need to start thinking about how they increase their productivity by 50 to 100 times (note: not percent, but a multiple of 50 to 100 times their current output with the same cost structure). At the same time, they need to be thinking about how they increase their exposure by the same multiple of 50 to 100x. They need to be thinking about how they become a news gathering and distribution platform for the web. They can’t do it alone, but if they embrace their audience and open their content they might have a chance. It will take radical innovation, but that’s what they need.