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New York Times: Thriving Amid The Decline Of Advertising Business

Aleksey Razdolgin profile picture
Aleksey Razdolgin


  • In Q2, the New York Times’s subscription revenues increased by 8.4% Y/Y to $293.2 million, while the advertising revenue declined by 43.9% Y/Y to $67.8 million.
  • Despite showing a decline in total revenues during the quarter, the company made a profit and beat its EPS estimates by $0.15.
  • With ~$750 million in cash and no debt, the New York Times continues to pay dividends and I consider it to be a safe long-term play for media investors.

New York Times (NYSE:NYT) is one of the few legacy newspapers that was able to reinvent itself and thrive in the age of digital disruption. While the traditional advertising industry continues to decline amid the rise of tech disruptors like Facebook (FB) and Alphabet (GOOG)(GOOGL), who control the absolute majority of the online advertising market, New York Times found a way to offset the losses of its advertising business and secure its long-term growth. By pivoting to the subscription business model a few years ago, the company was able to get more than 6.5 million paying subscribers, who generate the majority of income for the business.

Since the beginning of the year, the New York Times stock appreciated by nearly 50% and it has even more room for growth, as we approach the upcoming Presidential elections. With more than $750 million in cash and no debt, the New York Times continues to pay dividends and I consider it to be a safe long-term play for media investors. For that reason, I'm long New York Times.


As the newspaper and traditional advertising businesses are dying, the New York Times is able to thrive. After deciding to fully pivot to the subscription-based model five years ago, the company experienced an unprecedented growth of its earnings and was able to create value for its shareholders. In Q2, the New York Times's subscription revenues increased by 8.4% Y/Y to $293.2 million, while the advertising revenue declined by 43.9% Y/Y to $67.8 million. As a result, total revenues were down 7.5% Y/Y to $403.75 million, above the consensus by $14.5 million. However, the company made a profit and its non-GAAP EPS in Q2 was $0.18, also above the consensus by $0.15.

In addition, in the first half of the year, New York Times saw

This article was written by

Aleksey Razdolgin profile picture
Aleksey is CEO of the proprietary trading company Arbitrage Trades. Aleksey is in charge of creating new opportunities in this rapidly growing investments field. He is personally investing his own money into stocks, cryptocurrencies and other emerging trends of the financial industry.

Analyst’s Disclosure: I am/we are long NYT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (14)

Wooohooo! Hot dar#. No article about BA and instead about one of my favorite portfolio long-term holds ;-0 !!

NYT....was just talking about it to Stone Fox Capital in another thread the other day---that no one on SA had covered it in what seemed like eons.

NYT is, imho, one of the best stories over the past 5 years (my avg cost is in the teens in 2016) of a company toughening it out, re-shaping themselves in the middle of turmoil, and then growing their content and subscriber accounts, with cash flows moving in the right direction. The runway (for quality, hard-hitting content) growth for this company is in tact for the next decade or more.

NYT is one stock I am really comfortable with (now, of course, but it was touch and go 4-5 years ago) with sticking away and not looking until the next decade. That aforementioned runway? it's one of the best for any stock I've seen in years, and to think it is not named GOOG or FB or (you get the idea).

Best of luck to us all, and thanks to the author for throwing some light on a well-deserved turnaround/survival story.
What did you think of the q3 guide? Q4 2019 digital subcription revenues was $122M, Q1 2020 was $130M, Q2 2020 was $146M, and then the guide for q3 was $151M.

Are they setting up a softball expectation for the new CEO's first report?
Praveen_Chawla profile picture
Definitely the best news organization in the world now.
nerd_rage profile picture
Media that caters to a viewpoint is most likely to thrive. NY Times, Fox News...CNN is the type that's in trouble. People want media to confirm their biases, not be vanilla and objective.
Henry_22 profile picture
@nerd_rage - Bingo.

The sooner our media becomes like the UK's (where you know exactly what point of view the paper or broadcast is coming from) the better.

This silly notion of objectivity that is flouted by the US media is sickening.
Praveen_Chawla profile picture
False equivalence - comparing Fox News to CNN is like comparing Hitler to Mussolini. Both are bad but one is exponentially bad.
nerd_rage profile picture
Yeah, and the whole fetish about objectivity is a recent development anyway. Well recent in historical terms. In the 18th and 19th Centuries, journalism was very partisan and people liked it just fine.

As for CNN, I've been reading some comments from the HBO Max boss about using that as a way of delivering global news on streaming. Now that's the one area where being vanilla and "objective" might be needed because how do you deliver news to a global audience otherwise?

Of course right wing Americans are going to hate you, they are too skewed from a global perspective over to the right. CNN on a global HBO Max platform will have to find the middle of the road in global terms and stick to that. It'll be somewhat lefty from the average American standards.
Toilet Paper Times
nerd_rage profile picture
You're not the target market, that's all. Don't discount their power as a business. They have a big target market that has money and will spend it in NY Times. Good business.
Henry_22 profile picture
@jccnidan1 - AKA - "The New York Crimes"
Ron Burgundy’s Hair profile picture
nyt is the new ‘National Inquirer”
Redundancy - redundancy - redundancy
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