Newspaper Economics at Zero?

Henry Blodget links to this story outlining the latest in dire news for the newspaper business -- the New York Times Company (NYT) may be worthless:

"Net debt to (operating profit) is way too high," Barclays analyst Craig Huber said in a research note.

"We could argue the stock to zero given the high debt load...In our opinion, newspapers cannot cost cut themselves to prosperity and an online-only newspaper model is not profitable, not even close," Huber said in his research note.

Huber cut the company's stock price target to $1 a share and went on to argue that the Times Co. needed to sell its most valuable long-term asset:

"We view the 17.75 percent stake in the Boston Red Sox as having among the very best long-term asset appreciation potential at the company..."

That's a shame.

Comments

[Sam Stew:]

Dear Sirs:

I am wondering why the large US
newspapers facing bankruptcy
and possible loss of the 1st AMEND-
MENT protected FREE PRESS,
cannot create a new newspaper
industry 'band-aid fix,' 100% add-on
industry standard of USB smart
card (key ring format), supportave
of 100% 'paid content' in family
key encrypted format, featuring:

1). 1 unit [family secret key/issue],
global Internet/Web downloaded
at reading time, or in advance
into each USB smart card.

2). 1 unit of [public key-private key
pair/paid subscriber] factory
pre-installed per USB smart
card, for remote
authentication with Web servers,
download to 'paid subscribers.'

3). Spot family key, secret key encryption
for each downloaded issue, which is
decrypted real-time at the Web
HTML reader.

4). Archiving of family key encrypted
1 [family key/issue], newspaper content,
with option of USB smart card (key ring
format) e-newspaper clippings.

5). Blocking out of Google (R) and
Yahoo (R) robots or spiders from
access, since, cipher-text will be
retrieved.

This will give a 'paid content' and
'for profit' 100% electronic newspaper.

Sincerely,

Sam Stew
FREE PRESS supporter

Apr 25 08:41 PM

[Tim H.:]

This Craig Huber is wrong! There was just a story out off Seeking Alpha week or so ago from another writer who was friends with LA Times editor. The editor crunched numbers on an LA Times Online only business model. After cost cuts etc... Said model would be profitable. Sooo say NY Times filed for chapter 11 and erased all it's debt, cut the costs necessary for online paper etc... Then ran all it's owned papers as online only. Your going tell me NY Times wouldn't turn a profit??? Now as a newspaper reader I don't want that to happen. I am merely pointing out this barclays analyst is wrong. WORD for the wise. I realize bad situation in industry. But be very wary of seeking alpha writers and analysts who comment on industry. Very few cover industry and same goes for seeking alpha writers... I follow one's advice who over a long time have commented on industry. Ron Fountier of Seeking alpha is one. The writer for CBS Friedman is another one. I will use an example: Showing my bias I work for gannett. A co worker talked to a finnacial advisor and she told him Gannett was going bankrupt that he better get another job etc... gannett has issues but still made 25 cents a share (77 mil) in profit last qtr. Now just recently a value fund investment company increased it's shares in Gannett by 7.9% to almost 13% now owning $80 + mil in Gannett stock. New investment equaled around $50 mil. So whose dvice would you believe here? Some anaonymous financial advisor saying GCI is going bankrupt or someone who just invested almost $50 mil more in stock at $2.60. Stock at $3.50. My point being I follow where the money flows. Not saying GCI a good investment but I would question the argument GCI is going bankrupt any time soon. Long term no one knows...

Apr 26 05:47 PM