This is a two-notch downgrade, putting the company’s debt rating at Baa3, the lowest rating that is considered investment grade. “The downgrade reflects Moody’s view that NY Times’ free cash flow and leverage will remain significantly weaker in 2008 than previously expected due to ongoing deterioration in newspaper advertising revenue and cash that will be used to fund capital spending initiatives and the $132 million annual dividend,” the ratings agency said.
RBR/TVBR observation: Don’t look to Michael Bloomberg to be the savior of the Gray Lady. Responding to recent rumors that he might try to by the Times, His Honor said he has no interest in getting into the newspaper business. Smart guy.