Buying The Boston Globe was the worst business decision Pinch Sulzberger ever made. The news of its decline in value has now gotten so bad that the Times has just stopped reporting it. Can you blame them?
Yesterday, the Associated Press reported that the writedown of The Times's New England newspapers will now reach $166 million. That's up from last month's estimate of between $100 million and $150 million.
But today's Times didn't even bother to publish the news off the AP wire. The company had disclosed the figures in a Securities & Exchange Commission filing last Friday.
On October 23, media reporter Richard Perez-Pena wrote that The Times Company planned to write down the value of assets of its New England newspapers, including the Globe, by as much as $150 million. That came in a devastating story about the company's 51% drop in third-quarter profit, and its disclosure that it might have to cut its dividend. (Last year, NYTCo. had raised the dividend -- mostly because the Sulzbergers live off the dividends, a selfish move that has come back to bite Pinch in the ass.)
The latest figures alter the company's third-quarter earnings picture. On October 23, NYTCo. reported third-quarter net income of $6.5 million, or 5 cents a share; in light of the latest figures and related tax adjustments, the Times is now reporting a net loss of $106 million, or 74 cents a share, in the third quarter, compared with a profit of $13.4 million, or 9 cents a share, a year earlier, according to AP.
The Globe has proved a nightmarish investment for NYTCo. -- which paid more than $1 billion to buy it in 1993 -- but these dire new numbers out of Boston only underscore the deep problems that face the company. Steep drops in ad revenue and higher severance costs at the Times suggest further cuts ahead.
Don't stay tuned to the Times for further developments.