Analysts to Times: Great Job, Guys!

otrtimes Analysts to Times: Great Job, Guys!On Tuesday afternoon, in the cavernous ballroom at the Hyatt just outside Grand Central at the UBS Global Media and Communications Conference, New York Times Company executives like CEO Janet Robinson and CFO Jim Follo gave typically measured speeches in the face of what feels like the worst newspaper year ever.

“We appreciate you coming today to hear about the transformation occurring at the New York Times Company,” said Ms. Robinson, as a way of offering an introduction.

When a microphone was handed to an audience member, he asked the question many in the room wanted the answer to after Ms. Robinson’s 40-minute prepared speech: does the Times have any idea how dire their situation really is?

“We still continue to be a profitable company, and we still have good cash flows,” said Mr. Follo in response.

A day earlier, the day when the Tribune Company announced it was filing for bankruptcy, the screaming main headline on Drudge said it all: NEWS IS BROKE: NYT MORTGAGES HQ IN CASH CRUNCH.

It was referring to the Times Company’s recruitment of Cushman & Wakefield, a real estate firm, to find an investor who could offer the company up to $225 million in the form of a sale lease-back, or a mortgage to ease the pressure of the $400 million it owes lenders in May 2009.

It’s been a rough year. The Times Company’s stock has lost close to 60 percent in value, and its market capitalization is flirting with going under $1 billion.

Ms. Robinson and The Times’ publisher, Arthur Sulzberger, have been popularly cast by pundits and rivals as the bumbling leaders who have done little to stop the bleeding, and plenty to accelerate it by willfully ignoring it.

But if you ask the people who follow them closely—the analysts paid to track them and write reports on them, and who are, as a rule, unafraid to criticize them—they’ll tell you that that assessment isn’t really correct.

“They have not screwed up the company,” said Edward Atorino, an analyst at Benchmark who tracks the Times Company. “They’ve improved the product, they’ve cut costs, they’ve done everything right. But they got in the way in the worst recession in 25 or 30 years, and the worst environment for newspapers ever.”

“I would agree they have done a lot of things right,” said Catriona Fallon, an analyst for Citigroup, who said that the company has been aggressive in cutting costs.

“I don’t really think they’ve made any mistakes,” said John Morton, an independent newspaper analyst. “The best thing they have done is what they haven’t done. They haven’t plundered their properties. They haven’t done dramatic reductions in news staffs. They haven’t cut back on their commitments. It’s the things that they haven’t done that make them stand out.”

The Times Company has only cut modestly from the newsroom at its flagship paper—they cut about 100 jobs back in February, long before the crash, and its newsroom remains, by far, the biggest newsroom for any newspaper in the country, with around 1,200 people. They are shutting down their print distributor, City & Suburban, which will mean job cuts for more than 550 people, and they eliminated the stand-alone sections of Metro and sports. “They have been aggressive on cost-cutting in areas of the business that don’t directly affect the sales forces and the product,” said Ken Doctor, a newspaper analyst at Outsell. “That’s in printing, outsourcing distribution, cutting printing plants, you know, the unsexy part of the industry, but they are doing things that do make a difference.”