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Odysseus
02-20-2009, 05:55 PM
February 20, 2009
Times Co. Suspends Its Dividend to Raise Cash
By RICHARD PÉREZ-PEÑA

The New York Times Company suspended dividend payments to shareholders on Thursday for the first time in four decades as a publicly traded company, another in a series of concessions because of sharply lower newspaper revenue.

The decision by the board pre-empts a dividend payment that, on the usual schedule, would have been paid later this month. The annualized savings is just $34.5 million, because the dividend was already cut sharply last fall.


“Today’s decision provides the company with additional financial flexibility given the current economic environment and the uncertain business outlook,” the company chairman, Arthur Sulzberger Jr., said in a statement.

In May 2007, the company raised its quarterly dividend to 23 cents a share, from 17.5 cents. Newspaper advertising had already begun to slump by then, and the decision was second-guessed by some analysts.

The industry’s troubles steadily worsened through 2007 and 2008. The Times Company’s overall revenue last year fell 7.7 percent, and its newspaper ad revenue dropped 14.2 percent.

In November, the company cut the dividend to 6 cents, the lowest it had been since the 1980s.

Cash flow remains positive, but it is shrinking, and the company faces significant debt payments over the next 13 months, so it has taken several steps to raise cash. The company is seeking a sale-leaseback of a portion of its headquarters building, it is trying to sell its investment in the Boston Red Sox and it recently borrowed $250 million from the Mexican billionaire Carlos Slim Helú, an investor in the company.

The company has a two-class stock structure, with the majority of the supervoting shares held by a trust for Mr. Sulzberger’s extended family. For members of the family, the dividend has been a major source of income.

The trust released a statement saying, “In light of the economic climate and the challenges facing the media industry, the trustees believe that the board’s suspension of the dividend is in the best interests of all shareholders. All of the trustees remain committed to the editorial integrity and independence of The New York Times.”

Shares closed Thursday at $3.51, down 20 cents.

Copyright 2009 The New York Times Company

How long does anyone think that it will be before they ask congress for a bailout? :D

tacitus
02-20-2009, 08:03 PM
The bailout will come soon. The socialists can't let the flagship of the socialist media sink, so a few billion should tide them over for a few months. :mad: