Bad, bad day for the Boston Globe's parent company. From the New York Times's own write-up:
The New York Times Company sharply reduced its dividend on Thursday, just a year and a half after a major increase, as the company seeks to conserve cash amid concern about dwindling profit.Directors cut the quarterly dividend to 6 cents from 23 cents, which would save the company $97.8 million over a full year.The cut reverses a years-long pattern of regular increases, even as the share price fell. In the spring of 2007, the board raised the dividend to 23 cents, from 17.5 cents, a move that many analysts said was unwise in light of the sharp downturn in the newspaper industry.Shares in The New York Times Company closed down 63 cents on Thursday, to $5.72, its lowest point since the early 1980s. The dividend reduction was announced after the close of trading.The stock has lost more than half its value in the last month, dragging the market capitalization of the company below $900 million. It is down 67 percent this year, compared with 49 percent for the Standard & Poor’s 500-stock index and 89 percent since its peak in 2002.
Reporter Richard Perez-Pena goes on to discuss the possibility of the Sulzburger family selling the NY Times, or taking the company private. Here in Boston, though, the more pressing subject is what this nosedive means for the Globe.
Those are devastating numbers, and I have to think Times Co. management would gladly sell the Globe right now if it could. But with the paper reportedly losing $1 million a week, and recently undergoing its second big writedown, who'd want to buy it?
Problem is, if the Times Co. can't unload the Globe, it'll have to do even more to cut costs. So don't be surprised if the paper's work force--including the editorial department, which the Times Co. has protected compared to other newspaper owners--takes a serious hit in the near future