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From the Wall Street Journal:
New York Times Co.'s board voted to suspend the quarterly dividend, the publisher's latest move to conserve cash in a dismal economic climate.
Thursday's decision follows a 74% dividend cut in November and highlights the extent of the problems facing newspaper publishers, which have been imperiled by falling print readership and advertising.
The dividend has long been a healthy source of income for members of the Ochs-Sulzberger family, which controls Times Co. through a special class of super-voting shares. Before the November cut, the dividend paid family members about $25 million a year. Though the trustees of the Ochs-Sulzberger trust supported the move, industry analysts have questioned whether reducing or eliminating the payout would test the family's commitment to the paper.
On Thursday evening, the trustees of the Ochs-Sulzberger Family Trust issued a statement saying, "In light of the economic climate and the challenges facing the media industry, the trustees believe that the Board's suspension of the dividend is in the best interests of all shareholders. All of the trustees remain committed to the editorial integrity and independence of The New York Times."
Suspension of the dividend will save Times Co. about $34.5 million a year.
"Today's decision provides the company with additional financial flexibility given the current economic environment and the uncertain business outlook," said Arthur Sulzberger Jr., chairman.
With more than $1 billion in debt maturing over the next couple years and about $57 million in cash at the end of the fourth quarter, Times Co. has taken several major steps recently to gain financial flexibility. Late last year, the company began trying to sell its nearly 18% stake in New England Sports Ventures, the company that owns the Boston Red Sox, its ballpark and most of the network that airs its games. And last month Mexican billionaire Carlos Slim agreed to invest $250 million in the company, at a 14% interest rate, in return for senior unsecured notes with detachable warrants convertible into common stock.
Now Times Co. is seeking a sale-leaseback of part of its share of the 52-story headquarters building it occupies.
Times Co. joins a growing list of media companies, including E.W. Scripps Co., Media General Inc. and McClatchy Co., that have suspended their dividends.
Write to Russell Adams at russell.adams@wsj.com
New York Times Co.'s board voted to suspend the quarterly dividend, the publisher's latest move to conserve cash in a dismal economic climate.
Thursday's decision follows a 74% dividend cut in November and highlights the extent of the problems facing newspaper publishers, which have been imperiled by falling print readership and advertising.
The dividend has long been a healthy source of income for members of the Ochs-Sulzberger family, which controls Times Co. through a special class of super-voting shares. Before the November cut, the dividend paid family members about $25 million a year. Though the trustees of the Ochs-Sulzberger trust supported the move, industry analysts have questioned whether reducing or eliminating the payout would test the family's commitment to the paper.
On Thursday evening, the trustees of the Ochs-Sulzberger Family Trust issued a statement saying, "In light of the economic climate and the challenges facing the media industry, the trustees believe that the Board's suspension of the dividend is in the best interests of all shareholders. All of the trustees remain committed to the editorial integrity and independence of The New York Times."
Suspension of the dividend will save Times Co. about $34.5 million a year.
"Today's decision provides the company with additional financial flexibility given the current economic environment and the uncertain business outlook," said Arthur Sulzberger Jr., chairman.
With more than $1 billion in debt maturing over the next couple years and about $57 million in cash at the end of the fourth quarter, Times Co. has taken several major steps recently to gain financial flexibility. Late last year, the company began trying to sell its nearly 18% stake in New England Sports Ventures, the company that owns the Boston Red Sox, its ballpark and most of the network that airs its games. And last month Mexican billionaire Carlos Slim agreed to invest $250 million in the company, at a 14% interest rate, in return for senior unsecured notes with detachable warrants convertible into common stock.
Now Times Co. is seeking a sale-leaseback of part of its share of the 52-story headquarters building it occupies.
Times Co. joins a growing list of media companies, including E.W. Scripps Co., Media General Inc. and McClatchy Co., that have suspended their dividends.
Write to Russell Adams at russell.adams@wsj.com
