NYTCO Ad Revs Plunge 27%, Internet Revs Sag
Feeling the effects of a long-term decline in print media combined with one of the worst economic downturns in recent history, the New York Times Co. revealed disastrous first-quarter results Tuesday.
Total advertising revenues plunged 27% in the first three months of 2009 compared to the same period in 2008, from $458.3 million to $334.6 million. This drove a total revenue decrease of 18.6%, from $748 million to $609 million. Operating profit plummeted from $77.7 million in 2008 to just $16.5 million this year.
The revenue declines, which exceeded analyst expectations, were spread across all the main advertising categories. As usual, the largest drops came in classified advertising, which plunged 45% to $57.8 million. Meanwhile, national advertising fell 21.9% to $169 million, and retail fell 25% to $71.6 million.
Internet advertising revenues -- a bright spot in years past -- were also weak, posting a 6.1% decline from $72 million to $67.6 million. In the first quarter, Internet revenues accounted for 12.8% of the company's revenues, versus 11.1% during the same period last year. This was due to the fact they decreased less than total revenues, in percentage terms.
Looking to the future, things are grim.
In discussing the first-quarter results, NYTCO CEO Janet Robinson warned that the second quarter could see an advertising revenue decline of up to 30%. Faced with this prospect, the company is likely to implement more emergency measures to reduce costs, including pay cuts and layoffs.
Like other publishers, it may also resort to unpaid furloughs, halting pension or 401(k) contributions, and closing unprofitable newspapers. NYTCO threatened to close The Boston Globe in May if its unions do not make concessions to management -- which they have agreed, in part, to do. The company has also been attempting to sell its Boston Red Sox franchise without success for several months.
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