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Newspaper Economics Behind In The Count

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by Ryan Avent
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Apr 23 2009 2:50pm EDT

Newspaper Economics: Behind in the Count

Henry Blodget links to this story outlining the latest in dire news for the newspaper business -- the New York Times Company may be worthless:

"Net debt to (operating profit) is way too high," Barclays analyst Craig Huber said in a research note. "We could argue the stock to zero given the high debt load."...

"In our opinion, newspapers cannot cost cut themselves to prosperity and an online-only newspaper model is not profitable, not even close," Huber said in his research note. He cut the company's stock price target to $1 a share.

Huber went on to argue that the Times Co. needed to sell its most valuable long-term asset:
"We view the 17.75 percent stake in the Boston Red Sox as having among the very best long-term asset appreciation potential at the company..."
That's a shame.

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