On Wednesday morning at 11 a.m., Arthur Sulzberger and Janet Robinson will be managing a conference call that, from the looks of it, won’t be much fun.
They’ll be reporting The New York Times Company’s second-quarter earnings. Last time they did one of quarterly earnings calls, The Times reported big losses; there was a plan to cut 100 newsroom jobs, some through straight-up layoffs rather than superannuation and retirement deals.
And in the past few weeks, it’s only gotten worse: the company’s stock has fallen to a decade low, and tumbled more than 15 percent in just this month.
The Times is hardly alone. It trickles in day by day: more news of lost jobs and tumbling stocks for major newspapers and their parent companies. But as bad as newspapers have been doing—it’s been conventional wisdom for a few years now—the industry is actually doing much worse than most ever anticipated, and that’s become painfully clear over the past two months.
At the beginning of the year, things didn’t look so bad.
There was bad news, but it seemed consistent with what we’ve been getting warnings about for years now: In February, The New York Times announced it would cut 100 jobs from its newsroom, including laying people off for the first time ever.
Sam Zell, the brand new owner of the paper’s parent company, the Tribune Company, said: "Unfortunately, I can’t turn this ship from its course of the past 10 years within just a few months." He added, "But, make no mistake. This is not my ultimate strategy for our company."
The February cuts at The Times and the other Tribune papers looked like a one-time deal. Despite the undeniable blow to all these newsrooms, it seemed Mr. Zell was just clearing out some fat, and if there were future cuts, maybe they’d happen next year.
And indeed, things were beginning to look up. In June, Russ Stanton told MediaBistro that morale was starting to reappear at the paper and that people were "focused solely on doing great work and good stories and terrific journalism."
And then Sam Zell threw all that out the window the next day. "What has become clear as we have gotten intimately familiar with the business is that the model for newspapers no longer works," he said in a memo.
Ad revenue, as bad as its been in recent years, fell to levels that no one had anticipated either at Tribune papers or in the industry overall. Last year, ad revenue dropped 8 percent from 2006; this year there has been a double-digit decline from even that poor performance.
After gutting those 150 jobs earlier in the year, the L.A. Times fired 150 more people from its newsroom this past week. And the body count is getting larger all around the Tribune. This year, The Baltimore Sun is cutting about 100 jobs; the Chicago Tribune announced recently it would cut 80; the Sun-Sentinel about 50; the Hartford Courant would cut 57; and the Orlando Senintel about 50.
Last week, newsroom employees at the Sun picketed their building, carrying slogans calling for Mr. Zell’s ouster. But, of course, these problems are not just slamming Mr. Zell.
There was that business last week with Times stock dropping 15 percent in one week, to a decade low.
Over the past week or so, the paper’s stock has consistently been hovering in the $12 range, whereas it was batting around $14 just a few weeks ago.
The company’s stock began to fall after Craig Huber, an analyst for Lehman Brothers, wrote earlier this month in a letter to clients about his surprise that ad revenue is projecting a 9.1 percent decline this year, more than the 7.2 percent previously projected.
It’s obviously easy to look at ad revenues and a tanking economy and point toward that and blame this year on that. But there are other theories.
"Because we are in the newspaper industry, we spend a lot of time writing about the demise of newspapers," Katharine Weymouth, the new publisher of The Washington Post, told The Observer last week. "Nobody—I mean, we never see Katie Couric doing a 20-minute segment on the evening news talking about the audience that the nightly news is losing. I mean, they just don’t do those stories, right? We write a little obsessively about our own industry, I think. But when you look at the real story with what’s ha
ppening with newspapers, is there a seismic shift going on? Absolutely. Are ad revenues plummeting? Absolutely. But there is still a very good story."
But even she conceded: "This is not me being Pollyannaish," she said. "It’s real."