This is not like Tribune Company, which is seeking to sell the Chicago Cubs outright. The New York Times Company owns only 17.75% of the Boston Red Sox – a stake that came along with the Boston Globe in 2002 – and has retained Goldman Sachs to seek out potential buyers. Meanwhile, the NY Times Co. reported Q4 revenues down 10.8%, with ad sales down 17.6%.
What do you get if you buy the NY Times Co.’s 17.75% stake in New England Sports Ventures, LLC (NESV)? NESV owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80% of New England Sports Network, the cable sports network delivered to more than four million homes throughout New England and nationally via satellite, and 50% of Roush Fenway Racing, a leading NASCAR team. The NY Times Co. is casting a wide net to seek out any potential bidders. It even announced a phone number for interested parties to contact Gregory Lee at Goldman Sachs: 212-902-7584.
Meanwhile, if online revenues are supposed to be the salvation of the newspaper business as traditional advertising drops away, the date of that salvation is moving further away. The NY Times Co. reported that Internet ad revenues dropped 12.3% in December for websites associated with its newspaper properties and WQXR-FM New York. That wasn’t much better than the 15.8% drop in ad revenues for the entire News Media Group to $130.5 million.
Q4 2008 operating profits from continuing operations before depreciation and amortization plunged 25.6% to $118.5 million as revenues dropped 10.8% to $772.1 million.
“The disruptions of the global economy are affecting all businesses and industries, especially companies, such as ours, that generate a significant portion of their revenues from advertising. In this time of unprecedented change, we are responding strategically and creatively to manage our businesses and prepare for our future, while preserving the flexibility to navigate this difficult period. You have seen that in our decisions to restructure our cost base, to preserve capital by reducing our dividend, and to improve our financial position by completing the transaction announced last week. And you see that daily in how we are responding to the present realities of our markets,” said CEO Janet Robinson.
“As the economy deteriorated in the quarter, advertisers significantly reduced their spending. After growing almost 15% in the first nine months of last year, digital advertising decreased 3.5% in the fourth quarter as online marketers cut back on display ads in response to worsening business conditions. Despite the deepening recession, our circulation revenues increased 3.7% as a result of higher prices at The New York Times, The Boston Globe and our smaller newspapers. This is a testament to the value our readers believe we bring to them,” she said in the quarterly report to Wall Street.
To be sure, the company is being cautious about what lies ahead in 2009. “As we look ahead, we believe advertisers will continue to be cautious with their budgets, particularly in the early part of this year. To date in January the rate of decline in print advertising revenue has accelerated from what we saw in December, while that of digital is similar to last month. During this difficult time in our business and the economy, executing well on our strategy of providing outstanding journalism, developing new revenue streams, restructuring our cost base and improving our financial flexibility will help us meet the challenges we face,” Robinson said.
