The New York Times Co. (NYSE: NYT) is close to selling the 19 floors it occupies in the 52-story building that serves as its headquarters. The prospective buyer is W.P. Carey & Co. (NYSE: WPC).

The deal would be structured as a sale-leaseback, with the company continuing to occupy the space and pay rent. The New York Times Co. would also receive an option to repurchase the space in ten years. The Times own 58% of that building and would continue to rent the space it does not use to other tenants; that space would not be involved in the deal.

The Wall Street Journal reports (subscription required) that "a spokeswoman for Times Co. said the company is pursuing a sale-leaseback of the building for as much as $225 million but wouldn't comment further."

The deal will give the company some badly needed cash, although Carlos Slim's $250 million investment in the company ameliorated the urgency somewhat. It's unfortunate that The New York Times Co. paid out tons of dividends when times were good instead of putting something aside for a rainy day. Now it has no choice but to sell off a stake in the company at a paltry valuation while looking to shop real estate in a Manhattan market that is just starting to take a turn for the worse.

Two weeks ago it was The New York Times and now it's The Boston Globe, which is also owned by The New York Times Co. (NYSE: NYT).

Yesterday's paper featured, for the first time in the Globe's 136-year history, an advertisement on the front page.

Why start yesterday? Here's how desperate The Globe is for cash: They printed 100,000 extra copies because of the Obama inauguration coverage, and then stuck an ad for the movie "Defiance" -- which tells the true story of four Jewish brothers from Poland who escaped the Nazis and the rescued fellow Jews -- below the fold. Globe spokesman Bob Powers told The Associated Press that the advertiser picked that day on purpose to achieve maximum exposure.

Pretty good marketing decision by that ad agency: Buy the ad on a day with tons of extra circulation and then get more publicity by being the first ad to desecrate the sacred front-page of one of the most-respected newspapers in the country.

It sounds like a good movie. I think I'll go see it.

Emergencies make strange bedfellows. Carlos Slim, the Mexican billionaire, will put $250 million into The New York Times Company (NYSE: NYT). According to The New York Times, "Under the terms of the deal, Mr. Slim, who already owns 6.9 percent of the Times Company, would invest $250 million in the form of six-year notes with warrants that are convertible into common shares." The notes carry a 14% interest rate, which makes them the equivalent of junk debt.

If Slim lived in the US, The Times writers would beat him like a rented mule because of his close, some say too close, ties to the Mexican government. These cozy relationships are often viewed as one of the reasons he has done so well financially.

Forbes reports that Slim may be well-regarded outside Mexico, "But not in Mexico, where the media and the masses long have held a sneaking suspicion that there is something shady about Slim. He is decried as a rapacious monopolist who built his empire on cozy ties to Mexican presidents and other politicians."

Slim is a perfect target for investigative reporting, something The Times prides itself on. But, the paper needs the money, so Slim's potential conflicts of interest in his own country will be overlooked.

Douglas A. McIntyre is an editor at 24/7 Wall St.

The rumors about Mexican billionaire Carlos Slim investing in The New York Times Co. (NYSE: NYT) are heating up.

Andrew Ross Sorkin reports that Slim is near a deal to invest up to $250 million in a deal that could be approved by the company's board of directors today. According to Sorkin, "As part of Mr. Slim's investment, which resembles a loan, he is expected to get a special annual dividend, perhaps as high as 10 percent or more on this investment, these people said."

What is interesting is that Mr. Slim is not set to receive any control of the company's corporate governance. The company's dual-class voting structure that provides the Sulzberger family with total control of the company in spite of an equity stake of less than 20% has been a sore spot with many investors. Slim is also not looking to influence the company's operations.

But the nature of the deal may make that OK from Mr. Slim's perspective: A special annual dividend of 10% and warrants that allow him to benefit from stock price appreciation if things go well is a pretty good deal.

And while the cash infusion is good news for shareholders because it gives the company a liquidity breather, it will do little to solve any of the company's longer-term issues that created the balance sheet problem in the first place.

The New York Times Co. (NYSE: NYT) has plastered its desperation for cash over the front page of the morning newspaper. Reuters reports that "The New York Times is selling display advertising on its front page, its latest step to seek new ways to make money as it deals with a prolonged ad revenue downturn."

Monday's edition of the newspaper contained an ad for CBS below the fold on the front page.

Purists might be upset about it but the fact is that stuff like this may be The New York Times' best shot at staying independent. With the stock trading at under $8 per share, even the famously dormant Sulzberger family may decide that they've seen enough and look to sell -- If the company runs out of cash, they may not have a choice.

So if you're a supporter of journalism, buy the New York Times everyday -- ads on the front page are better than nothing.

The media has been filled with reports about how poorly the advertising at The New York Times Company (NYSE: NYT) has been doing. The company has $400 million in debt due next year. It is trying to sell its part of the parent company of The Boston Red Sox. NYT is even attempting to mortgage its headquarters building.

Bringing in new money won't do much long-term if revenue keeps falling. Cutting costs would.

One of the sections of The New York Times that must be costly to run is its business section. Looking at all the bylines, the staff must be in the dozens. But, a great deal of what runs in the business pages is not unique. Most of its is covered by Reuters, Bloomberg, FT, or The Wall Street Journal.

As the cost of being in the news business stays high and revenue drops, networks are pooling reporting resources. Newspapers are sharing coverage of certain geographic areas. Websites such as Politico are offering newspapers coverage of Washington to save money on having bureaus following the federal government.

The New York Times might be better off if it cut a deal with Bloomberg or the FT to handle its business section. The paper would still be competitive with The Wall Street Journal, and the move might be the start of a system to save a lot more money by doing something similar with other parts of the Times.

Douglas A. McIntyre is an editor at 24/7 Wall St.

I still remember when I realized that a real estate crisis was on its way. My wife and I were contemplating buying a home in Roanoke, Virginia, and began talking to a mortgage broker. When we saw the final offer, we realized that, if the real estate market continued on a stable path, and if the (then marginal) neighborhood continued to have a declining crime rate, and if the price of gas didn't go up, and if neither my wife nor I became seriously ill, then we would be great. In five years, when the rate went variable, we would refinance and everything would work out beautifully.

That was in 2004.

Thinking about it, my wife and I soon realized that those were a lot of ifs; while we wanted the house, we knew that we couldn't base our financial future on a deck of cards. After turning down the offer, I thought more and more about it and began to get worried. If a lot of people were buying into the kind of mortgage that my wife and I had declined, and if they had similar expectations about refinancing when their rates went variable, then it seemed likely that the mortgage industry was sitting on a major time bomb.

Analyst upgrades:

• Jefferies upgraded Buffalo Wild Wings (NASDAQ: BWLD) to Buy from Hold on valuation with the stock down 65% in two months as they believe the company has a "best-in-class fundamental story." The firm lowered its target to $25 from $30.
• Morgan Stanley upgraded Sanofi-Aventis (NYSE: SNY) to Overweight from Equal Weight on valuation and believes near-term cost reductions could provide a positive catalyst.
• Citigroup upgraded New York Times (NYSE: NYT) to Hold from Sell and lowered its target to $5.50 from $7 on valuation and believes the dividend cut will boost the company's liquidity.
• Pantry (NASDAQL PTRY) was upgraded to Outperform from Market Perform at Friedman Billings.
• LECG Corp (NASDAQ: XPRT) was raised to Buy from Neutral at UBS.
• Thomson Reuters (NYSE: TRI) was upgraded at RBC Capital to Outperform from Sector Perform.

Analyst downgrades:

• Jefferies downgraded Suntech (NYSE: STP) to Hold from Buy and lowered its target to $6 from $25 as they believe concerns about a convert refinancing in February 2010 will continue to weigh on the stock.
• Credit Suisse cut Ericsson (NASDAQ: ERIC) to Underperform from Outperform due to expectations for a decline in wireless infrastructure spending.
• ING downgraded shares of Rio Tinto (NYSE: RTP) to Hold from Buy as they believe it will be challenging for the company to execute asset sales planned at reducing debt in the current environment.

The New York Times (NYSE: NYT) reported that its October revenue got beat up again. If anything, it was worse than some previous months this year, but it's papers are caught in the vortex of a failing industry. For the month, advertising revenue was down 16.2%. Internet revenue only rose in the single digits, so online sales are not going to save the company.

In an odd way, the drop in revenue was the relative good news because the company also cut its dividend by a very large amount. The payout was cut by 74% to $0.06 per share. To make matters worse, the stock sold off 10% to a 52-week low of $5.72.

NYT has debt that is due next year. Its papers in New England, led by the Boston Globe, are losing as much as 20% of their ad revenue each month.

The company is controlled by the Sulzberger family, which has been in charge for over a century. One of the reasons the brothers and sisters, aunt and cousins have supported management was for the rich payout they received each quarter. Now, that is going away.

With an unhappy family, the company may be in play. Perhaps Rupert Murdock might buy it. NYT would make a nice bookend for The Wall Street Journal.

Douglas A. McIntyre is an editor at 247wallst.com.

In an attempt to cut costs, The New York Times Co. (NYSE: NYT) is folding Play, the quarterly sports magazine launched in February of 2006, as the weak economy and declining ad sales slam its stock price and threaten the future of its dividend.

The Wall Street Journal reports (subscription required) that the company explored a variety of options for making Play work, including cutting staff and going online-exclusive, but there was just no way to make the magazine profitable.

It's a shame for sports fans because, as you'd probably expect from The New York Times, it offered a level of intelligence and nuance that is rare in the world of sports writing. A few years ago, the concept might have had a better shot, but with the company's balance sheet the way it is, it's just not in a position to bleed cash on projects that might pan out well over the long-term.

As the stock price craters, you have to wonder at what point the company will become an attractive takeover target once the economy begins to turn around. But with a dual-class voting structure that puts one family in total control of the company's future, a deal seems unlikely even if it is in the best interests of shareholders.

Analyst upgrades:

• Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices. AMR Corp (NYSE: AMR) and Delta Air (NYSE: DAL) were upgraded to Add from Neutral and UAL Corp (NASDAQ: UAUA) was raised to Neutral from Reduce.
• Ryanair (NASDAQ: RYAAY) was upgraded at Citigroup to Buy from Hold.
• Boardwalk Pipeline (NYSE: BWP) was raised to Buy from Hold at Deutsche Bank.
• Cowen lifted Biogen Idec (NASDAQ: BIIB) to Outperform from Neutral.
• JP Morgan upgraded Choice Hotels (NYSE: CHH) to Neutral from Underweight following the better-than-expected Q3 report.
• Oppenheimer upgraded shares of Integra LifeSciences (NASDAQ: IART) to Outperform from Perform on valuation, the company's minimal exposure to economic conditions, and expectations for margin improvement and a rebound in organic growth.

Analyst downgrades:

• Sherwin-Williams (NYSE: SHW) and AerCap Holdings (NYSE: AER) were downgraded to Neutral from Overweight at JP Morgan.
• UBS downgraded Embarq (NYSE: EQ) to Neutral from Buy following the CenturyTel (NYSE: CTL) merger announcement.

Has management of New York Times Co. (NYSE: NYT) finally woken up and smelled the coffee? Not only did the third-largest newspaper publisher report awful earnings, but the New York-based company also announced that it might cut its dividend, a move that will hit the controlling Sulzberger-Ochs family where it hurts -- in the pocketbook.

Net income at the publisher of the namesake newspaper fell 51.4 percent to $6.52 million, or 5 cents a share, compared with $13.4 million, or 9 cents, a year earlier, the company said in a press release. Total revenues decreased 8.9 percent to $687.0 million from $754.4 million. Advertising revenue fell a whopping 14.4 percent as companies reduced marketing spending because of the uncertainty about the economy.

Commenting on the expected carnage in the financial markets today, The New York Times notes that "Now, the risk for the financial firms is that investors will respond by trying to do exactly what they are trying to do - minimize their risk. If enough investors do that and choose to sell, stocks could plummet in markets worldwide, thus increasing the risks rather than easing them."

In reality, it's exactly the opposite. The lower the stock market drops, the lower the risk is. A stock market decline could trigger problems for over-leveraged financial companies dependent upon their credit ratings for their access to capital but, for mom and pop investors, an opportunity to buy stocks at lower prices is good.

In the long run, companies are worth whatever they're worth. Paying 50 cents for an asset is less risky than paying $1, and long-term minded investors should look forward to days like these. There may be other factors that are increasing risk for investors, just as excessive leverage at so many banks has, but lower prices certainly don't qualify as a risk.

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.

Shares of The New York Times Co. (NYSE: NYT) are trading higher today after the company posted a second-quarter profit of $21.1 million, or 15 cents per share. NYT's adjusted profit came in at 26 cents per share, beating analysts' estimates of 22 cents per share. The company also annouced an increase int eh newsstand price from $1.25 to $1.50. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NYT.

After hitting a one-year high of $23.85 last July, the stock hit a one-year low of $12.08 last week. NYT opened this morning at $13.05. So far today the stock has hit a low of $12.38 and a high of $13.42. As of 1:15, NYT is trading at $13.00, up $0.16 (1.1%). The chart for NYT looks bearish and steady, while S&P gives the stock a bearish 2 Stars (out of 5) Sell rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $12.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just four weeks as long as NYT is above $12.50 at August expiration. NYT would have to fall by more than 4.3% in the next few weeks before we would start to lose money. Learn more about this type of trade here.