About the only bright spot was the company's Internet business, which posted a 6.7% revenue gain. But alas, it is far too small to make up for the shortfall in its print business. Remember, that despite all of their talk about the online world, newspapers still make most of their money as they have for centuries: by dead trees and ink. That explains why the Times is taking some pretty drastic actions.

In addition to reviewing its dividend, the company is reducing capital expenditures by about $80 million, writing down the assets of its New England Media Group by $100 million to $150 million, and looking for ways to further slash costs (perhaps additional layoffs). You can bet that the company is considering unloading both the Boston Globe newspaper and its stake in the Boston Red Sox.

Maybe this attention to cost-cutting was the result of its new investor Mexican billionaire Carlos Slim, who bought a 6.4% stake in the media company last month. Maybe its a sign of the growing influence of Harbinger Capital and Firebrand Partners hedge funds.

The Sulzberger family has been able to keep a stranglehold on the New York Times by controlling its Class B voting shares. That strategy has worked by keeping the villagers from storming the castle. Over time, the castle's defenses have gotten soft and the villagers have gotten smarter. Now, they have breached the fortress defenses and the lords of the manor are looking for any weapon to keep them at bay. There is only so long they can keep this up before surrendering to superior forces.