Debt ratings for the New York Times Company have been put under review by Moody's Investors Service, with an eye to a downgrade. Moody's says it is worried about high leverage and deteriorating operating margins. There was no specific mention of the broadcast operation, but the ratings agency is worried about risks in the newspaper sector and questioned the leverage increase from borrowing to acquire About.com.

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Moody's statement.

"Moody's Investors Service has placed The New York Times' A2 senior unsecured long term debt, and P-1 commercial paper ratings on review for possible downgrade.

The review is prompted by Moody's growing concerns about The New York Times' high financial leverage, deteriorating operating margins and weak FCF available for debt reduction, combined with concerns over intensifying cross media competition, including the internet, and growing event risk in the newspaper sector. The company's significant share repurchase activity over the last four years, debt financed acquisition

of About.com, and capital expenditures associated with the transition to its new headquarters leaves the company with a significant debt burden, heightened adjusted leverage, resulting in diminished financial flexibility.

A multi-notch ratings transition will be considered in light of the company's financial and operating challenges. The review will focus on The New York Times' ability and commitment to materially reduce debt over the next eighteen to twenty four months, and its ability to improve its operating trends and margins. The company's ability to mitigate event and execution risks surrounding the newspaper industry will also be considered in the review process. Moody's will evaluate the longer-term effect of competitive pressures from lower cost media, particularly internet based searchable database services, on the company's ability to achieve its operating targets.

The New York Times Company, headquartered in New York City, is a major media company with operations in newspaper publishing, broadcasting, and information services."