BusinessWeek recently posed the question of how The New York Times Co. (NYSE: NYT) could be worth so little? The question is worth pondering.
The company has a market cap of about $1.8 billion, roughly the price that CBS Corp. (NYSE: CBS) recently agreed to buy CNET for. Its enterprise value is about $2.85 billion.
Lehman Brothers analyst Craig Huber estimated that the Boston Globe and 15 regional papers could be sold for $575 million after taxes, and valued the company's 17% stake in the Boston Red Sox at $152 million and estimated NYT's portion of its new headquarters at $750 million. About.com, which the Times bought for $410 million three years ago, could fetch a tidy profit if it were sold today.
"Does anyone really believe that Times Co.'s other assets --The New York Times, the International Herald Tribune, and its New York City radio station -- could be worth only $750 million?" the magazine asked. Remember that Cablevison Systems Corp. (NYSE: CVC) recently agreed to buy Newsday, a smaller paper, for $650 million, which was a pretty steep price.
The math, I agree, makes no sense.
But remember that the New York Times is not a typical company. Time and time again, management has shown disdain for shareholders not named Sulzberger. Even by the standards of the newspaper industry, the Sulzberger clan is held in particularly low regard, even though it recently jacked up its dividend by 31%.
Time is not on their side.
Advertisers are keeping a close eye on their budgets and will be more than willing to cut spending on print at the first sign of trouble. Remember that for all of their talk about the Internet, newspapers are primarily a print business and will be for some time. It's no surprise that the stock is down by more than 47% over the past year.
How can the New York Times be worth so little? Easily
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Reader Comments (Page 1 of 1)
7-25-2008 @ 10:29PM
Dave said...
The New York Times use to be fair and ballanced. I somehow belive that for the purpose of hiring less paid workers, the paper gave up experenced professionals at all levels and isn't quite as ballanced as before. Most people can get their news online and aside for the Sunday crossword puzzle, I see no place for it to exist.
7-25-2008 @ 11:16PM
tomreetz said...
Apparently English is not Dave's primary language, so the NYT is difficult for him to follow...
7-26-2008 @ 12:58AM
Erique said...
It used to be that journalism was reporting facts and "editorials" were opionated reflection. The NYT is a perfect example of the failure of true journalism in the manipulation and agenda of all stories. It jut became undependable for facts. Too many times it got caught "red in the face" after having been exposed. It is one of the reason why CNN is losing out to Fox. Surely Fox has an agenda. But it separates news reporting from "opinion" shows. (Although it does show it's leanings too.) I think a larger part of Americans want real facts. Even liberals and conservatives alike are sickened by slanted news coverage. Many of us feel betrayed by these organizations. They stimulate and sensationalize the adolescent mentality of many, which doesn't help our soceity to mature and make good decisions. I rarely take any news item at face value anymore.
7-26-2008 @ 4:06AM
Monty said...
I am no genius, but even I can sense that the news is slanted.
7-26-2008 @ 6:20AM
MaggieMo said...
The NYT has lost its credibilty with people looking for news consisting of facts, not opinion. Its scandals, biased opinion based "news stories" and poor management have make it almost a joke outside of the NYC areas. "All the news fit to print" has indeed become "All the news that fits (our agenda), we print".
7-26-2008 @ 8:08AM
dave said...
Saturday morning and here i have just read the best news of the day....the new york times is goin broke....isn't that wonderful!!!! i live in albuquerque nm...recently an 84 year old misinforming liberal newspaper by the name of the albuquerque tribune went belly up...those so called reporters are now writing for the radical daily kos blog....hurry! hurry! someone tell me cbs, nbc, abc, msnbc and cnn are following in the tracks of the new york times....
7-26-2008 @ 11:46AM
LFS1952 said...
I agree with MaggieMo's assessment.
The NYT's ultraliberal agenda has become a joke--it's almost predetermined what a new article's going to say, and the Op Eds--forget it--it's always the same leftwing loonie rich liberals spel--they're rich and totally divorced from the impact of the policies that they advocate!