Recent Blog Posts
-
Nicked Off: The Curious Path of Gawker's Chief
Oct 11 20102:39 pm EDT -
Conde Nast Closing 'Portfolio'
Apr 27 200910:02 am EDT -
Newspaper Circ: 'WSJ' Gains as 'NY Post' Tumbles
Apr 27 20099:32 am EDT -
Idle Chatter: The Prognosis for Newspapers, more
Apr 27 20098:55 am EDT -
Late Breaks: MySpace, NYT, 'New York'
Apr 24 20094:01 pm EDT -
Nostalgia, Entitlement and Murdoch's 'Journal'
Apr 24 20094:00 pm EDT -
Huffpo's Lerer on the 'New and Better' Journalism
Apr 24 200912:44 pm EDT -
Ailes Heats Up Cold Spring with Newspaper War
Apr 24 200912:33 pm EDT -
Happy Friday. Now Watch This.
Apr 24 200910:24 am EDT -
Idle Chatter: NPR Cutbacks, Jon Meacham, more
Apr 24 20098:50 am EDT
Links
- SI.com - Richard Deitsch

- I Want Media

- Editor & Publisher

- Galleycat

- Magazine Death Pool

- WWD's Memo Pad

- Talking Biz News

- Media Nation

- Hollywood Wiretap

- FAIR

- The Media Pundit

- NYT Media

- MediaFile

- Gapper Blog - Media

- Jezebel

- The Business Insider

- Viral Video

- Ad Age

- Newsbusters

- News After Newspapers

- Nikki Finke

- News Hounds

- NY Observer media page

- Valleywag

- Paid Content

- TVNewser

- Nieman Journalism Lab

- Romenesko

- Keith Kelly

- Contact Me

- Cover Awards

- Tyndall Report

- Jon Friedman

- Gawker

- Jon Fine

- Media Shift

- HuffPo Media

'NYT' Dilemma: Cut Dividend or Get Junked
How long can The New York Times Co. afford to buy shareholders' goodwill? Bloomberg reports today that the company "faces increased financial pressure to cut its dividend as credit quality deteriorates amid record advertising declines." Moody's is threatening to downgrade the Times to a junk rating unless it does something about its anemic cash flow. The current quarterly payout of 23 cents gobbles up $132 million a year that could otherwise be reinvested or used to pay down debt.
The situation reminds me of something former Wall Street Journal managing editor Paul Steiger said when he spoke to the Medill Club a few weeks ago. Noting that the Times Co. had just announced earnings from continuing operations of 15 cents a share, he observed, "When you're borrowing money to pay your dividends, that's my definition of losing sustainability."
Irony alert: Here's what Times publisher Arthur Sulzberger said back in March of last year when the company upped its dividend from 17.5 cents a share: "The strong cash flow of the company and our current financial position, with the upcoming sale of our broadcast unit and radio station, give us the ability to return more capital to shareholders."
Update: It appears that the calls for a dividend reduction have pushed down the stock price.
Comments
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.





