The New York Times Company’s stock soared today as it was announced that the Old Gray Lady has exceeded third quarter expectations by raking in $80.6 million, a 30% increase from 2008.
The company, which includes other properties like the Boston Globe and About.com, opened a full dollar higher than where it closed yesterday and increased steadily all day to $10.72 a share for a 22.5% growth.
In a letter to employees, Times publisher Arthur Sulzberger stated that the company is “moving in the right direction” thanks to employee comittment.
“Ultimately, it is your extraordinary dedication that is allowing us to achieve the results that we have reported today … and it is this same dedication that will enable us to achieve our long-term goals and aspirations.” – Arthur Sulzberger
But in reality the answer is simpler than putting the proverbial nose to the grindstone as Sulzberger claims.
Earlier this week, the New York Times announced they would be cutting 100 newsroom positions before the end of year. With increasing subscription costs and re-negotiation of severance pay, these cuts are just the latest in the company’s efforts to lower costs.
Sulzberger even concedes this point, saying, “while actual circulation volume has declined, our circulation revenue increased 6.7 percent due to price increases” but qualifies that statement by adding, “clearly, the demand for our quality journalism in print remains substantial.”
But is this really “the right direction” as Sulzberger contends? Is it truly healthy for the New York Times Company to keep its head above water with budget cuts, price increases and layoffs? Obviously this can’t continue forever, and the company will need to improve upon its floundering advertising revenues to remain in business.
Sulzberger believes things are turning around on the advertising front.
“Early in the fourth quarter, print advertising trends have improved modestly compared to the third-quarter, while digital advertising trends are improving more significantly.” – Arthur Sulzberger
We all know the day the New York Times folds is the day pigs fly, hell freezes over and we all eat our hats, but for the company to continue to be a dominant force in the news industry they will have to recover from the advertising lull so they can continue to innovate and push newspapers in a new direction.