The media: Can The New York Times survive?

The vultures are circling The New York Times, said Thomas B. Edsall in HuffingtonPost.com. Like its competitors, the nation’s premier newspaper has been squeezed by a precipitous drop in advertising, declining circulation, and the lack of a viable business model on the Internet. But the Times, which lost $74.5 million in the first quarter of 2009, also carries $1 billion in debt due to a series of bad business decisions, including the ill-timed construction of a costly new headquarters in Manhattan and the 1993 purchase of the now-unprofitable Boston Globe for $1.1 billion. Things are so bad, the Sulzbergers and Ochses, the two families that have controlled the paper for 113 years, might have to sell it. Through the decades, “no competitor has ever been able to match” the Times’ sustained record of excellence. A takeover, especially by a hostile “outsider” like conservative media mogul Rupert Murdoch, would be “a cataclysmic event in American journalism.”

“Hogwash,” said Jon Friedman in Marketwatch.com. Sure, the Times is a fine paper, but there’s no reason another owner couldn’t produce excellent journalism—and better business decisions. By my calculation, the Times may have new owners surprisingly soon, said Henry Blodget in BusinessInsider.com. In desperation, the company borrowed $250 million in January from Mexican billionaire Carlos Slim at loan shark­–like terms. With an interest rate of 14 percent, the debt service on the six-year loan—$210 million—will almost equal the amount borrowed. When the creditors demand cash, the Sulzberger/Ochs clan will have only two real choices: fire a large number of its 1,200 newsroom employees, or “give up control of the newspaper to save it.”

As the Times’ media columnist, I think these “Chicken Littles” are wrong, said David Carr in The New York Times. The Times’ website has 20 million unique visitors a month, and if the company finds some “sweet spot” that enables it to charge some of these readers for access to some content, the financial picture will brighten. Meantime, the company has the financial room to maneuver at least “into 2011.” If the bottom line doesn’t improve by then, though, said Stephen Foley in the London Independent, suitors will start the bidding. In addition to Slim and Murdoch, Hollywood mogul David Geffen and billionaire New York Mayor Michael Bloomberg are reportedly interested in buying the paper. One way or another, the Times will continue. But the reign of the Sulzbergers may not.

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