They Say Every Time A Member Of The Mainstream Media Loses His Job, An Angel Gets His Wings…
Here’s David Carr in the New York Times,
“It’s been an especially rotten few days for people who type on deadline. On Tuesday, The Christian Science Monitor announced that, after a century, it would cease publishing a weekday paper. Time Inc., the Olympian home of Time magazine, Fortune, People and Sports Illustrated, announced that it was cutting 600 jobs and reorganizing its staff. And Gannett, the largest newspaper publisher in the country, compounded the grimness by announcing it was laying off 10 percent of its work force — up to 3,000 people.
Clearly, the sky is falling. The question now is how many people will be left to cover it.
It goes on. The day before, the Tribune Company had declared that it would reduce the newsroom of The Los Angeles Times by 75 more people, leaving it approximately half the size it was just seven years ago.
The Star-Ledger of Newark, the 15th-largest paper in the country, which was threatened with closing, will apparently survive, but only after it was announced that the editorial staff would be reduced by 40 percent.
And two weeks ago, TV Guide, one of the famous brand names in magazines, was sold for one dollar, less than the price of a single copy.”
Carr, in a move typical of mainstream media hacks these days, left out another very big story that was a bit too inconvenient to mention: on the 23rd of this month, the New York Times, the very paper he’s writing in, had its “credit rating slashed to junk.”
Standard & Poor’s on Thursday slashed its ratings on the New York Times Co into junk territory and cited concerns about the newspaper publisher’s revenue outlook, after it posted a third-quarter loss.
Moody’s Investors Service also said it may follow the move, adding the publisher faces risks in refinancing its debt.
The New York Times posted a quarterly loss from continuing operations on Thursday and said advertising revenue at its news media group dropped 16 percent for the quarter.
…”It is our estimate that the company’s total revenue will decline in the mid-teens percentage area in 2008 year over year, and that earnings before interest, taxes, depreciation and amortization (after buyout expenditures) will decline by more than 30 percent in 2008 and by about an additional 30 percent well into 2009,” S&P said.
It cut the Times’ rating three notches to “BB-minus,” three levels below investment grade, from “BBB-minus.” The outlook is negative, indicating an additional cut may be likely over the next one-to-two years.
That caught my eye because of something my friend Cara Ellison had written about the NYT back in August,
For the last four quarters, the New York Times’ assets have decreased and debt has increased. At the end of the second quarter, cash and cash equivalents were approximately $42 million and total debt was approximately $1.1 billion. Without knowing exactly how the debt is structured, it is impossible to see the full context, but just glancing at the flat numbers, this is -objectively – a staggeringly terrible ratio. After a series of downgrades on their commercial paper, S&P, Moody’s and Fitch have been threatening to downgrade their debt one notch to junk territory since July. Such a downgrade would be catastrophic.
…I believe the New York Times is in imminent danger of collapse. I believe that unless something dramatic happens within the next quarter, their debt will be downgraded to junk. Once that happens, a collapse is virtually unavoidable. A run on the bank will ensue and the company will go bankrupt. There will be no government bailout a la Fannie Mae and Bear Stearns. It will simply cease to exist.
Cara correctly predicted that the New York Times would be downgraded to junk, but is she correct that the paper is destined to collapse? Maybe. It certainly seems hard to see how a fading business with over a billion dollars of debt, in a dying industry, is going to keep its head above water when it only made 10 million dollars last quarter.
As far as I’m concerned, the New York Times can’t go belly-up fast enough to suit me — and that goes for most of the rest of the mainstream media outlets out there.
These papers have stuck to a non-functional revenue model, they’ve sneered at bloggers, and they’ve completely abandoned any and all attempts to be objective in order to act as flacks for the Democratic Party. That’s why, every time I read a story about journalists being laid off, I give a little silent cheer. There are few people in America, outside of the members of Congress and radical professors at colleges across the country, who deserve to be put out of work more than the people at newspapers across this country.
PS: No, I’m not predicting newspapers will go away. The old media is always going to be there although it will probably get much leaner and more web based in the future.
PS #2: I’d suggest that conservatives help move these papers along into bankruptcy by refusing to buy subscriptions to the print versions of the papers and using Craigslist to post classified ads. If you absolutely have to look at a paper, use the internet version where possible because they don’t get as much revenue from the net — mostly because it’s much harder to lie about the number of people that are seeing the ads.