Unexpectedly Intriguing!
April 6, 2009

Panic, Confusion Reigns Among Newspaper's Owners, Management

Last year, we made a bold prediction:

Sometime, within the next twelve to eighteen months, the average circulation of the weekday edition of the New York Times will drop below one million. This event marks the continuing decline in the fortunes of what had been the U.S. newspaper of record as the New York Times' average circulation has been well above this level for decades.

New York Times Weekday Circulation, 1993 Through 2008 We can now confirm that this prediction appears to be very nearly on target, which we'll demonstrate later in this post. First though, let's confirm that 2008 wasn't kind to the New York Times, as its latest annual report indicates. The New York Times 10-K SEC filing reveals that the various strategies mounted by the newspaper's management to forestall the loss of circulation in its home market and nationally has, at best, only stabilized the rate of descent of the newspaper's print circulation. Our first chart (right) illustrates the continuing loss of readers both nationally and especially in the newspaper's 31-county home market in New York.

We confirm that since peaking in 1993, the New York Times has lost some 12.8% of its total circulation. More remarkably, the newspaper has lost 37.2% of its circulation within its home market. This result is partly by design, as the newspaper's management has pursued a national marketing strategy at the expense of its local market, as evidenced by the smaller declines for other newspapers within the New York market. Those smaller declines translate into increased market share for the other newspapers.

Our updated table below provides the circulation numbers that we used to create the chart above. Clicking the "Year" links provides the relevant NYT's SEC filing for the indicated year, from which we obtained the newspaper's circulation data, which is reported in the section of the annual report in which the company's management discusses its business:

New York Times Average Weekday Circulation, 1993 through 2008
Year Weekday Circulation (Mon-Fri) Weekday Percentage of Total Circulation in NYC Weekday Circulation Within NYC Market Weekday Circulation Outside NYC Market Percentage Decline of Total Weekday Circulation
1993 1,183,100 64 757,184 425,916 0.0
1994 1,148,800 64 735,232 413,568 -2.9
1995 1,124,300 62 697,066 427,234 -5.0
1996 1,111,800 62 689,316 422,484 -6.0
1997 1,090,900 62 676,358 414,542 -7.8
1998 1,088,100 61 663,741 424,359 -8.0
1999 1,109,700 60 665,820 443,880 -6.2
2000 1,122,400 59 662,216 460,184 -5.1
2001 1,143,700 58 663,346 480,354 -3.3
2002 1,131,400 55 622,270 509,130 -4.4
2003 1,132,000 53 599,960 532,040 -4.3
2004 1,124,700 50 562,350 562,350 -4.9
2005 1,135,800 49 556,542 579,258 -4.0
2006 1,103,600 48 529,728 573,872 -6.7
2007 1,066,600 47 501,302 565,298 -9.8
2008 1,033,800 46 475,548 558,252 -12.6

New York Times' Sunday Circulation, 1993 through 2008 The outcome of the New York Times' management's national circulation strategy at the expense of its local circulation becomes clearer when we look at the newspaper's Sunday circulation. The chart below shows the trend in the New York Times' Sunday circulation since 1993.

As of 2008, we confirm that the New York Times has lost nearly half of its circulation in its home 31-county market in New York, falling some 47.1% from its peak value recorded in 1993. We also confirm that nationally, the print circulation of the Sunday edition of the New York Times has fallen 18.6% since its peak value of nearly 1.8 million in 1993.

We've summarized all the annual data for the New York Times' Sunday edition circulation in the table below. Clicking the "Year" links provides the relevant NYT's SEC filing for the indicated year, from which we obtained the newspaper's circulation data, which is reported in the section of the annual report in which the company's management discusses its business:

New York Times Average Sunday Circulation, 1993 through 2008
Year Sunday Circulation Sunday Percentage of Total Circulation in NYC Sunday Circulation Within NYC Market Sunday Circulation Outside NYC Market Percentage Decline of Total Sunday Circulation
1993 1,783,900 63 1,123,857 660,043 0.0
1994 1,742,200 63 1,097,586 644,614 -2.3
1995 1,720,300 60 1,032,180 688,120 -3.6
1996 1,701,800 60 1,021,080 680,720 -4.6
1997 1,651,400 59 974,326 677,074 -7.4
1998 1,638,900 58 950,562 688,338 -8.1
1999 1,671,200 56 935,872 735,328 -6.3
2000 1,686,700 55 927,685 759,015 -5.4
2001 1,659,900 53 879,747 780,153 -7.0
2002 1,682,100 51 857,871 824,229 -5.7
2003 1,682,100 49 824,229 857,871 -5.7
2004 1,669,700 47 784,759 884,941 -6.4
2005 1,684,700 44 741,268 943,432 -5.6
2006 1,637,700 44 720,588 917,112 -8.2
2007 1,529,700 42 642,474 887,226 -14.2
2008 1,451,300 41 595,033 856,267 -18.6

We believe that the New York Times' print circulation for its weekday editions is now beginning to fall below the one-million mark. We base this belief upon the steady decline we observe in the newspaper's reported average weekday circulation. Here, if take the average rate of decline recorded in the past three years of 2.9% for its total circulation, we would project that the circulation level that the New York Times will report in its next SEC 10-K filing will be roughly 1,000,000. Given the typical variation we might expect to see on a week-to-week basis, that figure will confirm that the newspaper's circulation is indeed falling below one million on an increasingly frequent basis.

The declines in print circulation that we've documented above reflect the continuation of a deteriorating business situation for the New York Times, as lower print circulation figures point to lower revenues realized through advertising and subscriptions. While the New York Times is continuing to grow its online presence and corresponding advertising revenues, online ads generate far less revenue than do traditional advertisements, which strains the company's financial performance.

We see the deterioration of the New York Times' business situation as the media company's owners and management are taking more and more panicked measures to sustain the business. Here, the New York Times' management is pursuing drastic measures to avoid bankruptcy proceedings, and has demonstrated a willingness to further compromise the integrity of its journalistic product to do so, continuing the New York Times' management's longstanding policy of trading accuracy for access, now for the sake of staying in business.

Most telling, the editor of the New York Times' has publicly likened the newspaper's plight to genocide in the Darfur region of Sudan, suggesting a profound level of moral confusion on the part of the newspaper's management. That the editor later sought to minimize the impact of his statement by professing surprise that people might take his words at face value suggests a lack of seriousness and commitment to pursuing any sort of journalistic mission. That the editor wasn't disciplined indicates that lack of seriousness and commitment is shared by the New York Times' management and owners.

All of which begs the question: just what does the New York Times' management think they're in the business of doing anyway?

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