The New York Times Company (the “Company”) was incorporated on August 26, 1896, under the laws of the State of New York. The Company is a diversified media company that currently includes newspapers, Internet businesses, investments in paper mills and other investments. Financial information about our segments can be found in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 18 of the Notes to the Consolidated Financial Statements. The Company and its consolidated subsidiaries are referred to collectively in this Annual Report on Form 10-K as “we,” “our” and “us.”
We classify our businesses based on our operating strategies into two segments, the News Media Group and the About Group.
The News Media Group consists of the following:
— The New York Times Media Group, which includes The New York Times (“The Times”), the International Herald Tribune (the “IHT”), NYTimes.com and related businesses;
— the New England Media Group, which includes The Boston Globe (the “Globe”), Boston.com, the Worcester Telegram & Gazette (the “T&G”), the T&G’s Web site, Telegram.com and related businesses; and
— the Regional Media Group, which includes 14 daily newspapers in Alabama, California, Florida, Louisiana, North Carolina and South Carolina, their Web sites, other print publications and related businesses.
The About Group consists of the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Caloriecount.com and related businesses.
Additionally, we own equity interests in a Canadian newsprint company, a supercalendered paper manufacturing partnership in Maine, Metro Boston LLC (“Metro Boston”), which publishes a free daily newspaper in the greater Boston area, and quadrantONE LLC (“quadrantONE”), which is an online advertising network that sells bundled premium, targeted display advertising onto local newspaper and other Web sites.
We also own a 17.75% interest in New England Sports Ventures, LLC (“NESV”), which owns the Boston Red Sox, Fenway Park and other real estate, approximately 80% of New England Sports Network (the regional cable sports network that televises the Red Sox games) and 50% of Roush Fenway Racing, a leading NASCAR team. We are exploring the possible sale of our interest in NESV.
Revenues, operating profit and identifiable assets of foreign operations are not significant. Our businesses have historically experienced second and fourth quarter advertising volume that is generally higher than first and third quarter volume because of lower economic activity during the winter and summer. We believe these seasonal trends were partially masked in 2009 and 2008 by volume declines principally attributable to the general economic slowdown.
The New York Times Media Group
The New York Times
The Times, a daily (Monday through Saturday) and Sunday newspaper, commenced publication in 1851.
International Herald Tribune
The IHT, a daily (Monday through Saturday) newspaper, commenced publishing in Paris in 1887, is printed at 35 sites throughout the world and is sold in approximately 180 countries. The IHT’s average circulation for the years ended December 27, 2009, and December 28, 2008, were 219,256 (estimated), and 239,689, respectively. These figures follow the guidance of Office de Justification de la Diffusion, an agency based in Paris and a member of the International Federation of Audit Bureaux of Circulations that audits the circulation of most of France’s newspapers and magazines. The final 2009 figure will not be available until April 2010. Effective March 2009, the IHT serves as the global edition of The Times
NYTimes.com and Other Digital Platforms
The Times’s Web site, NYTimes.com, reaches wide audiences across the New York metropolitan region, the nation and around the world. According to Nielsen Online, average unique visitors in the United States to NYTimes.com reached 17.9 million per month in 2009. The Times and the IHT reach an audience around the world with global.nytimes.com (formerly iht.com). We also distribute content on other digital platforms, including mobile applications and social networking sites, as well as reader application products offering a digital reading experience similar to print.
NYTimes.com derives its revenue primarily from the sale of advertising. Advertising is sold to both national and local customers and includes online display advertising (banners, large-format units, half-page units, interactive multimedia), classified advertising (help-wanted, real estate, automotive) and contextual advertising (links supplied by Google). In January 2010, we announced that we will introduce a paid model for NYTimes.com at the beginning of 2011.
The New York Times Media Group’s other businesses include:
— The New York Times Index, which produces and licenses The New York Times Index, a print publication,
— Digital Archive Distribution, which licenses electronic archive databases to resellers of that information in the business, professional and library markets, and
— The New York Times News Services Division, which is made up of Syndication Sales and Business Development. Syndication Sales transmits articles, graphics and photographs from The Times, the Globe and other publications to almost 1,500 newspapers, magazines and Web sites in 90 countries worldwide. Business Development principally comprises Photo Archives, The New York Times Store, Book Development and Rights & Permissions.
New England Media Group
The New England Media Group comprises the Globe, Boston.com, the T&G, Telegram.com and related businesses. The Globe is a daily (Monday through Saturday) and Sunday newspaper, which commenced publication in 1872. The T&G is a daily (Monday through Saturday) newspaper, which began publishing in 1866. Its Sunday companion, the Sunday Telegram, began in 1884.
Regional Media Group
The Regional Media Group includes 14 daily newspapers, of which 12 publish on Sunday, one paid weekly newspaper, related print and digital businesses, free weekly newspapers, and the North Bay Business Journal, a weekly publication targeting business leaders in California’s Sonoma, Napa and Marin counties. In March 2009, we sold the TimesDaily, a daily newspaper located in Florence, Ala., and its Web site, TimesDaily.com, for $11.5 million.
The About Group includes the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Caloriecount.com and related businesses.
About.com focuses on delivering high-quality content that is personally relevant to its users. The Web site has nearly 800 topical advisors or “Guides” who produce original content across more than 70,000 topics and 2.5 million articles. About.com was one of the top 15 ad-supported Web sites in the United States in 2009 (per Nielsen Online), with 40 million average monthly unique visitors in the United States (per comScore) and 75 million average monthly unique visitors worldwide (per About.com’s internal metrics).
ConsumerSearch.com analyzes expert and user-generated consumer product reviews and recommends the best products to purchase based on the findings. UCompareHealthCare.com provides dynamic Web-based interactive tools that enable users to measure the quality of certain healthcare services. Caloriecount.com offers weight management tools, social support and nutritional information to help users achieve their diet goals.
The About Group generates revenues through cost-per-click advertising (sponsored links for which the About Group is paid when a user clicks on the ad), display advertising and e-commerce (including sales lead generation). Cost-per-click advertising, which in 2009 represented more than 50% of the About Group’s revenues, is principally derived from an arrangement with Google under which third-party advertising is placed on the About Group’s Web sites.
FOREST PRODUCTS INVESTMENTS AND OTHER JOINT VENTURES
Forest Products Investments
We have a 49% equity interest in a Canadian newsprint company, Donohue Malbaie Inc. (“Malbaie”). The other 51% is owned by AbitibiBowater Inc. (“AbitibiBowater”), a global manufacturer of paper, market pulp and wood products. Malbaie manufactures newsprint on the paper machine it owns within AbitibiBowater’s paper mill in Clermont, Quebec. Malbaie is wholly dependent upon AbitibiBowater for its pulp, which is purchased by Malbaie from AbitibiBowater’s paper mill in Clermont, Quebec. In 2009, Malbaie produced 214,000 metric tons of newsprint, of which approximately 27% was sold to us, with the balance sold to AbitibiBowater for resale.
We have a 40% equity interest in a partnership operating a supercalendered paper mill in Madison, Maine, Madison Paper Industries (“Madison”). Madison purchases the majority of its wood from local suppliers, mostly under long-term contracts. In 2009, Madison produced 190,000 metric tons, of which approximately 4% was sold to us.
Malbaie and Madison are subject to comprehensive environmental protection laws, regulations and orders of provincial, federal, state and local authorities of Canada or the United States (the “Environmental Laws”). The Environmental Laws impose effluent and emission limitations and require Malbaie and Madison to obtain, and operate in compliance with the conditions of, permits and other governmental authorizations (“Governmental Authorizations”). Malbaie and Madison follow policies and operate monitoring programs designed to ensure compliance with applicable Environmental Laws and Governmental Authorizations and to minimize exposure to environmental liabilities. Various regulatory authorities periodically review the status of the operations of Malbaie and Madison. Based on the foregoing, we believe that Malbaie and Madison are in substantial compliance with such Environmental Laws and Governmental Authorizations.
Other Joint Ventures
We own a 17.75% interest in NESV, which owns the Boston Red Sox, Fenway Park and other real estate, approximately 80% of New England Sports Network, a regional cable sports network, and 50% of Roush Fenway Racing, a leading NASCAR team. We are exploring the possible sale of our interest in NESV.
We own a 49% interest in Metro Boston, which publishes a free daily newspaper in the greater Boston area.
We also own a 25% ownership interest in quadrantONE, which is an online advertising network that sells bundled premium, targeted display advertising onto local newspaper and other Web sites. The Web sites of the New England and Regional Media Groups participate in this network.
We had approximately 7,665 full-time equivalent employees as of December 27, 2009.