The Departure of New York Times’ CEO a Sign of the Times
Last month New York Times Co (NYSE:NYT) had to let go its CEO, Janet Robinson, apparently due to pressure from Chairman Arthur Sulzberg and his cousin Michael Golden, who is currently Chief Operating Officer.
Robinson is leaving with an exit package of over $21 million, and her departure could not have come at a more inopportune moment considering the company’s deteriorating performance due to falling print revenues whose slack has not been taken up yet by the digital side of the business. Profitability has been further eroded due to high pension and interest costs even though the company has taken steps to divest businesses such as its loss-making regional newspaper division. About 70 per cent of its $237 million operating profit last year went towards servicing interest payments and pension contributions.
The company is expected to announce its results for last year on Feb 2 with revenues down 2.7 per cent from 2010 to $2.33 billion, the sixth straight year of declining revenues. The stock has lost 84 per cent of its value since 2004. It last paid a dividend in 2007, and dissatisfied family owners have been clamoring for resumption in dividend payouts. The company’s board is controlled by the Ochs-Sulzberger family via its holding of 90 percent Class B shares.
Robinson’s exit is almost certain to create a leadership crisis in the company, given that it is looking for an outside, non-family candidate for her position. Chairman Arthur Sulzberger is currently interim CEO, and said in an interview last month that “We’re in a very challenged sector. We can’t pretend we aren’t,” about about how digital platforms could choke off access to news content.
‘‘The sword that’s hanging over the neck of the next CEO is the death spiral of print advertising,’’ Ken Doctor, media analyst for Newsonomics and Outsell Inc. said. ‘‘That’s the challenge.”