Dear Mr. Berko: Please give me your opinion of The New York Times. I may buy 400 shares. Also, what do you think of The Wall Street Journal?
— CA, Rochester, Minn.
Dear CA: Thanx to the internet, we’ve been watching the decline of the newspaper industry during the past dozen years. Sadly, too many publishers have passively accepted their papers’ diminution, knowing their publications will continue to be less valued by their communities. Certainly, there won’t be more newspapers like the 12-pound, 1,612-page Sept. 14, 1987, edition of The New York Times (NYT-$24), which caused a surge in hernia procedures at Mount Sinai and NewYork-Presbyterian hospitals. Most publishers were unprepared for the digital revolution. Few publishers drank from the fountain of knowledge, and most others just gargled.
Using yesterday’s solutions for today’s problems, NYT’s concussed management initiated wide-scale cost-cutting measures and restructuring to strengthen margins. That didn’t help. Fewer readers were thumbing through the pages of the paper for daily doses of local, state and national news. So management began to streamline and reshape its business model, divesting underperforming assets and reducing payroll and pension costs. Resultantly, management began to generate strong growth in its formative digital advertising revenues. NYT’s management offers mobile applications to readers who want to stay current on the go, with interactive features that complement printed articles. The ramping up of digital platforms has generated strong results that should ensure long-term growth. Few papers can brag about having a reputation as an investigative newspaper, but the Times can. Proof of the pudding can be found in the recently awarded Pulitzer Prizes for its news coverage. The Times has had to turn itself topsy-turvy to succeed in a very difficult operating environment. It has worked. Management has considerably improved its competitive edge during the past few years, and NYT’s share price has risen from below $10 to $26.
I subscribe to The New York Times. It’s tossed on our driveway seven days a week. It’s a delightfully written, albeit overly liberal, paper with a daily circulation of over 570,000 and about 3 million paid digital subscribers. Though the copy editing of the Times has suffered under budget constraints and layoffs, most of its articles and columns are still competently and crisply written, while the content is apropos.
