Thursday, June 25, 2009

New York Times Sale Rumors Quashed... For Now

In an interview with MarketWatch's Jon Friedman, Janet Robinson, CEO of embattled former media titan and now merely distressed media company scrambling to plug debt covenant holes, New York Times, has announced that she has had it with other members of the evil, speculative media world.

Robinson objects to criticisms surrounding the company's handling of the much-publicized labor negotiations with the Times' Boston Globe unit. She is weary of the endless speculation that the Times has already decided to launch a pay model for some or all of its Internet properties, noting that the company expects to make an announcement this fall.

And no, no, no -- the Times is not about to be acquired by Mexican billionaire and prominent Times stockholder Carlos Slim, Hollywood mogul David Geffen or anybody else, she says. Robinson is particularly tired of hearing the rumors that the company will be sold.

Robinson's unhappiness with the media echoed throughout my nearly two-hour lunch with her at the Times headquarters on Tuesday. The media, Robinson told me, "have to look beyond the stock price."

Janet - we do, and all we see is a mountain of piling debt with scary covenants attached, which if not addressed will result in an even worse stock price ($0.00 is worse than any 52 week low).

Robinson most resents the rumors that the Times is on the block. The Sulzbergers, who run the company, "are committed to the ownership structure it has now," she said.

"The family has made it very clear that they are the owners of the New York Times Company and are very supportive" of the stewardship of Robinson and Arthur Sulzberger Jr., the chairman of the parent company and publisher of the New York Times.

Resents sale rumors? Nobody in their right mind would go after the NYT equity at this moment - in fact, the NYT would be ecstatic to find someone who would be willing to pay even half of last year's high for this melting ice cube. Carlos Slim (and others) is smart - he is buying fulcrum debt and fully expects to get equitized (read debt-for-equity conversion), when the company files for bankruptcy. And file it will, unless it manages to dramatically reduce its existing debt load. But for that to happen, existing debtholders will extract their pounds of flesh. Either way, the Sulzbergers' moment of fame (and max wealth) is over: at this point they can fool themselves with promises of a future that will never occur (they are forgiven for this - after all this is the administration's MO, and the sterling example our President sets for corporate America), or they can proactively address the mountain of debt, and part with a major chunk of equity in exchange for keeping the company alive. Of course, if existing trends in media ad spend, and commodity price inflation (ahem, paper) persists, nothing the NYT, Janet or the Sulzbergers do will have any relevance on the future at all. Sphere: Related Content
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