The New York Times places itself first, readers and shareholders last

Based on its decision not to instruct Judith Miller to obey the law in the Plame affair, we now have a clear understanding of the New York Times’ view of the proper order of things in America. Here’s the pecking order:

The New York Times
Supreme Court
Democratic President
Democratic Senate
Democratic House
Various leftish fads and causes: Gitmo, Abu Ghraib, Augusta, al Qa Qaa, etc.

New York Times readers
New York Times Shareholders

The New York Times should have told Judith Miller that she was fired if she did not obey the law; by not doing so, the NYT placed itself above the courts. It is hard to think of a more perfect symbolic act by the Times to illustrate where it believes it sits in the pecking order of society. By contrast, the readers and shareholders of the New York Times have been treated very shabbily in recent years, in our view as a direct consequence of the ideological excesses of the newspaper. Many of them have voted with their feet.

Placing readers last

As we have reported previously on several different occasions, the New York Times has suffered huge losses in circulation in its home market in recent years. These numbers are obscured in the SEC filings of the New York Times Company, but they are available to anyone willing to go through the effort to calculate them.

The New York Times reports its circulation numbers on a consolidated basis, which can be misleading, given the Times’ push for greater national distribution in the last twenty years. The consolidated numbers paint a picture that is not too bad. But the Times’ performance in its home market, the 30 counties around Manhattan, has been a disaster:

1993 NYT home market circulation: 758,400
2004 NYT home market circulation: 562,350
Decline in circulation: 26%

The Times now places third in its home market behind the Daily News and the Post, and the bad news for the Newspaper of Record is likely to get even worse, according to a report which we have previously cited from Editor and Publisher:

“Decline in both quality and quantity of circulation at several key newspapers owned by the New York Times Co. and Tribune, points to the potential for further pricing pressure from advertisers in future quarters,” the report observed. “In particular when ABC guidelines move to a strict limit on days omitted allowance, the New York Times’ newspapers may suffer further circulation declines.”

We note that the New York Times Company will report earnings this Thursday. Analysts expect profits to be down 14% from the same period last year.

Placing shareholders last

The stock market has figured this bad news out of course and has had the predictible reaction. Over the last two years, the market has killed NYT stock, taking it from almost $50 a share to around $30:

The results are even worse when you look at the Times stock versus the market as a whole, in this case the S&P index:

While the broad market has gone up 10%, the New York Times’ shareholders have lost almost 30% of their money. Put another way, New York Times shareholders have lost over 40% of the money they would now have simply by being in a diversified portfolio. Disastrous.

How can a public company get away with this?

Normally, in a public company, you would expect the independent directors to take action to stem the losses and to enhance shareholder value. The New York Times is not a normal public company, however.

The New York Times gets away with its appalling stewardship of its franchise, because it is not in business principally for its readers or its shareholders. There are around 144,000,000 shares of the New York Times that trade freely, but these do not have any power. Control of the New York Times resides in a mere 738,810 shares of non-trading class B stock which reside in a family trust and have the power to elect 70% of the Board of Directors. Pause a moment to take this in: one half of one percent (0.5%) of the stock of the New York Times gets to elect 70% of the directors.

The New York Times is upfront about all this of course in its Proxy Statement filed with the SEC, in which it details the objective of the family’s 1997 trust:

The primary objective of the 1997 Trust is to maintain the editorial independence and the integrity of The New York Times and to continue it as an independent newspaper, entirely fearless, free of ulterior influence and unselfishly devoted to the public welfare…

Evidently the term “public welfare” does not include the welfare of shareholders.

When will the family revolt?

The politics of family businesses can be particularly nasty. It is one thing to profess all sorts of high-minded claptrap when you’re riding high on the hog; it’s quite another when the dividends dry up and the tuition at Sarah Lawrence is due. We’ll wait and watch. We are looking forward to the mini-series.

(HT: Donald Luskin)

17 Responses to “The New York Times places itself first, readers and shareholders last”

  1. Jeffrey boshart Says:

    I recently canceled my subscription to the Raleigh News and Observer. When they called me to find out why, it was very satisfying to tell them that the paper had “way too many” articles from the New York Times and that paper had zero credibility. The comment was met with silence.

  2. Eric Says:

    NYT is a main, if not the, main driver of the MSM news cycle.

    If it doesn’t not turn its flood-the-zone covergae on an issue with its attendent masquerading opinion-as-news front page commentary, then the SEC does not feel the need to address it.

    I cancelled my weekly subscription 3+ years ago and my weekend-only one a year or so ago. (yes, that puts into right at the onset of the 2004 Presidential campaign.)

    When I feel like returning, and the former paperboy in me has influence that is much greater than I like to admit, I read an article like the one about Ryan Howard a couple weeks ago where it was said his current lack of promotion to the bigs was contributing to the lack of interest in the sport by black youth.

  3. JorgXMcKie Says:

    One has to wonder how the NYT would have reacted in 1974 had Richard Nixon said, “Screw the Supreme Court” and burned all the White House tapes. How would this have differed from the Miller case at hand?

  4. max Says:

    Perhaps the Sulzbergers are actually not upset about the stock price decline – Pinch’s father and aunts are in their late 70s, maybe early 80s, and the lower the stock price the less will have to be paid in estate taxes if one of them dies.

    Which is not to say the Sulzbergers are somehow manipulating the stock price down (I have no reason to think they are) but simply to point out the lower price does have at this time have a possible upside for them.

  5. Says:

    New York Times Running Out?

    NOTE: Most, and perhaps all, NY Times links require registration.
    Nadagate seems to have played out, and barring a shock I don’t anticipate, has resulted in a big fat nothing.
    What is Nadagate? It’s the name given …

  6. Victor Bloom MD Says:

    I cancelled my subscription to the NYT many years ago, having previously been a subscriber for over a half century. I still have my subscription for The New Yorker.

    The NYT has become a liberal rag and I refuse to support it.

    I can still scan it for free online, a phenomenon which probably explains its print subscription drop.

  7. Victor Bloom MD Says:

    Journalistic integrity requires a reporter to face jail rather than disclose sources. The issue is of sufficient importance to go to the Supreme Court. It is very important for a democracy to have a free press, as well as free speech.

  8. erp Says:

    BB — Perhaps the intended goal of embarrassing and impeaching Bush and/or causing him to commit hari-kari by exposing top administration aids as liars and leakers has fizzled out, but I sincerely hope the unintended result of this debacle hasn’t fizzled.

    There’s plenty of culpability here, but it’s the traitors in the CIA who conspired with pals in the media and Clinton operatives to defeat the president. It’s a family affair and the NYT is the godfather. We know that Cooper’s wife, Mandy Grunwald is a former Clinton adviser currently on Hillary Clinton’s staff, and we know that Clinton made an ambassador of Joseph Wilson. There are still a lot more dots to be connected, like why Judith Miller? What is her connection to all this?

    Real reporters should be telling all about Miller and why she won’t testify. Speculate on her all you want guys. Pretend she’s someone on Bush’s staff. Find out dirt on her kids, her grandmother, anybody.

    It’s obvious Miller is in jail because testifying about what she knows would put her in grave danger.

    The reputations and, dare we hope, jail time of leftwing icons are at stake. I look forward to the special prosecutor’s report. It seems obvious that he is continuing his investigation even though the primary targets, Rove and Libby, have been cleared of wrong doing by the testimony of their prime witness, Matt Cooper and by remarks made in public by Joseph Wilson who has virtually confessed to lying about the whole affair.

  9. Billy O Says:

    Pinch sides with the North Vietnamese; Jason Blair; the Augusta National nonsense; Abu Grabeh; the Catholic priest “pedophilia” lie; Krugman/Rich/Dowd/Lewis/ dimentia; Bush is a liar/illegitimate/a moron. I think I will find my reading pleasures elsewhere, thank you.

  10. China Ate My Blog! 中国吃了我的博客! :: NYTimes Share Price :: July :: 2005 Says:

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  11. Adamon Says:

    A little, insignificant correction — you wrote
    “While the broad market has gone up 10%, the New York Times’ shareholders have lost almost 30% of their money. Put another way, New York Times shareholders have lost over 40% of the money they would now have simply by being in a diversified portfolio.”

    – This does not add up like this… Take $100 gone $110 in a diversified portfolio, but if kept in NYT stock, would go to $70. But this is 0.6364 of the $110, or 36.36% loss, not over 40%.

  12. Leper Says:

    All of this proves that the New York Times is still a leader. It leads virtually all other media in the sheer loss of readers—and revenue. (Except, perhaps, CNN and their loss of viewers.) By leading by example, they have also brought down The L.A. Times, The Washington Post, The Seattle Post-Intelligencer and dozens of other newspapers that followed the Times like Lemmings to the slaughter. It’s time for the Grey Old Lady to go to the nursing home and suckle the last of the McGovern/Jimmy Carter Kool-Aid.

  13. Bud hiller Says:

    Unfortunately, the NYT has agressively purchased papers in the South, especially Florida. Here in Sarasota, they own the only paper in the county, The Herald-Tribune.
    Sarasota is one of the fastest growing, rich areas in the US and the Times is thus the beneficiary of a rich franchise here.
    Ironically, Sarasota is a solid 65% Republican. Nevertheless, we are battered by a constant barrage of NYT columnists and a local mamagement that actively aligns itself with the impotent Democrsat minority.
    While small compared to the NYT, the Sarasota paper must be a goldmine helping to keep the NYT solvent.

    Bud Hiller

  14. LarryW Says:

    The NY Times is a disgrace; a once proud newspaper has allowed itself to become a campaign pamphlet for leftwing positions. The confidence in reporting on any hint of a scandal with this current administration is embarrassing, considering this same paper’s reluctance to report on Clinton Scandals that ultimately lead to among other things a former US President’s disbarment by a Federal Judge.

    Reporting the news means reporting all sides of the news. Take for example the CIA/WILSON/PLUME/Rove story affectionately known to some as Nadagate. The reporting of this story has completely ignored the NYTimes own defense (along with other MSMedia outfits), in the Plume case, specifically the the papers own defense that indicate that Plume was outed several years ago, and thus there is no crime…and thus Judith Miller shouldn’t be in jail. The fact that the paper ignores an argument it makes for one of its own (which would pretty much put this story to bed), is proof positive of the media unashamed bias (and hatred) against Republicans.

    Well the Numbers don’t lie. NY Time stock is plummeting because people are sick of this crap. Advertisers are not going to pay premium dollars to advertise in a publication that caters to only a select subsection of confused individuals. Lower readership means lower advertising dollars which means lower stock price. You can fools some of the people some of the time, but you cant fool all the people all the time, especially when there are other sources to get information. When Rush Limbaugh who makes no bones that he advocates the conservative position does a better job explaining a news story then the NY Times, you have a serious problem well actually the NY Times has a serious problem.

    Thank g-d for the free market!

  15. OhBloodyHell Says:

    > NOTE: Most, and perhaps all, NY Times links require registration.

    There’s a simple solution to this, which is bugmenot:

    They almost always have a working NYT reg

  16. derek rose Says:

    not only are you confused on how to calculate percentages, your analysis ignores that the Times Co. pays dividends. Obviously it’s not a growth stock.

  17. CaptiousNut Says:

    Yeah Derek, and the S&P 500 pays dividends as well that aren’t counted.

    You are clearly missing the point of this post.

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