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How Dividend Cut Puts NYT's Future in Play

  • Portfolio, Monday, November 24, 2008 10:45 AM
Perhaps it is time for the Sulzbergers to think hard about taking The New York Times Co. private. With last week's announcement that the company's dividend was to be reduced 74%, observers note that going private would be a lot less expensive for the NYT now than the last few years. On the other hand, credit is also a lot more expensive. Plus, the value of the assets the company would have to sell to finance the deal is a lot lower.

But the dividend cut adds new urgency to the consideration. The independence of the newspaper is secure as long as the family hangs together. The key question is to what extent that family cohesion depends on a generous dividend.

Insiders have said the two are inseparable. "Once that dividend is cut, then all hell will break loose, because that's what the family lives on. Then it's over. It's going to unravel, " says one Times executive.

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