Here’s the latest milestone in the story of newspapers’ decline in the digital age. The Times paid $1.1B for the Boston daily n 1993 — the highest price ever for a U.S. newspaper. Today it announced that it has agreed to sell its New England Media Group, which includes the Boston Globe, to Fenway Sports Group for $70M. John Henry is the principal owner of Fenway Sports, but the chairman is Tom Werner who co-founded The Carsey-Werner Company and was executive producer of TV hits including The Cosby Show, Roseanne, 3rd Rock From The Sun, and That 70s Show. In addition to the Globe, the company is picking up BostonGlobe.com, Boston.com, the Worcester Telegram & Gazette, Telegram.com, GlobeDirect (a direct mail marketing company), and a 49% stake in Metro Boston. Times CEO Mark Thompson says that the sale will enable him to “sharpen our company focus on and investments in The New York Times brand and its journalism.” The Times put the Boston-area properties up for sale in February, the last part of its ongoing effort to shed non-core assets. Henry’s Fenway Sports Group also owns Fenway Park, 80% of the New England Sports Network, 50% of NASCAR team Rousch Fenway Racing, and English Premier League’s soccer team Liverpool F.C.
NEW YORK– The New York Times Company (NYSE: NYT) today announced that it plans to sell its New England Media Group, including The Boston Globe and its related properties, and that it has retained Evercore Partners to advise the Company and manage the sales process.
“Our plan to sell the New England Media Group demonstrates our commitment to concentrate our strategic focus and investment on The New York Times brand and its journalism,” said Mark Thompson, president and CEO of The New York Times Company. “The Boston Globe and the Worcester Telegram & Gazette are outstanding newspapers and they and their related digital properties are well-managed leaders in their markets with real opportunities for future development. We are very proud of our association with the Globe and the Telegram & Gazette, but given the differences between these businesses and The New York Times, we believe that a sale is in the best long-term interests of these properties and the employees who work for them as well as in the best interests of our shareholders.”
Lawyers’ Letter Raises Questions About When Mark Thompson Learned Of Alleged Jimmy Savile Abuse At The BBC: NYT
Joe Utichi contributes to Deadline’s UK coverage
Just four days into his new job as CEO of The New York Times Company, Mark Thompson is again the subject of an article in its flagship newspaper. A story published today by The New York Times says a new piece of information “raises questions” about assertions Thompson has made with regard to when he learned of allegations of sexual abuse against late BBC host Jimmy Savile. Thompson told the NYT in October, “During my time as director general of the BBC, I never heard any allegations or received any complaints about Jimmy Savile.” He has also maintained that he knew nothing of a cancelled investigation by the BBC‘s flagship current affairs program Newsnight into the claims against Savile. But the NYT reports today that a letter sent by lawyers eight days before Thompson left the BBC in September reveals he was involved in “aggressive” legal action pertaining to the Savile story. The letter, sent on behalf of Thompson and news chief Helen Boaden, threatened Rupert Murdoch’s Sunday Times newspaper with “defamation proceedings” if it were to publish an article alleging the pair had orchestrated a cover-up over the scuppered Newsnight broadcast.
The NYT, which has closely scrutinized Thompson’s role in the saga, says the letter has been revealed to include a summary of the abuse alleged against Savile, and the fact that some of the abuse was alleged to have taken place on BBC premises. A Thompson aide told the NYT that Thompson orally authorized the sending of the letter but did not know the details of its contents. “It’s not clear if he was shown it,” the aide said, “but he doesn’t remember reading it.”
UPDATE, 10:30 AM: New York Times publisher Arthur Sulzberger, Jr. emailed staff today to welcome former BBC director general Mark Thompson as CEO of The New York Times Company. Thompson joins The Times just two days after his BBC successor resigned from the broadcaster amid ongoing editorial turmoil that has shaken public faith in the venerable company. Here is the text of Sulzberger’s message:
Mark will lead us as we continue our digital transformation, bolster our international growth, drive our productivity and introduce new technologies that will help us become better storytellers and enrich the experience for our readers and viewers …
That is what he did as director general of the BBC. His experience will be of great value to our company as we continue our pursuit of creating the highest quality journalism and the business results to support it.
All those who have met Mark, from staff members to our board of directors, admire his focus, meaningful expertise and appreciation for the long-term future of the Times Company.
PREVIOUS, 6:48 AM: Former BBC director general Mark Thompson started work as CEO of The New York Times Company today, despite concerns of some Times journalists about his suitability for the job amid ongoing turmoil at the British broadcaster. ITV News grabbed the exec this morning as he was walking into the Times building where he said he believes that the BBC troubles “will not in any way affect my job, which I’m starting right now.” On the subject of the resignation this weekend of his BBC successor George Entwistle, he said, “Look, like many people, I’m very saddened by recent events at the BBC. But I believe the BBC is the world’s greatest broadcaster and I’ve got no doubt that it will
UPDATE: BBC’s Interim Director General Emails Staff; Broadcaster Clarifies “Stepping Aside” Of News Chief Helen Boaden
2ND UPDATE 3:20 AM: Following Saturday’s resignation of BBC director general George Entwistle, the BBC Trust appointed Tim Davie, an executive from outside the news chain, to become acting director. A permanent director is to be appointed in the next few weeks, but in the meantime, Davie has written to BBC employees. He sent an email to staff this morning, which The Guardian has posted in its entirety. In part, it reads: “The BBC is a precious institution and I am determined to give the BBC the clarity and leadership it deserves in the next few weeks. What I will also do is continue what George set out – to work tirelessly on getting rid of anything that gets in the way of delivering the best of British creativity to our audiences. There will be no handbrake turn.”
It’s a dreary day for the Grey Lady: The New York Times Co stock is down nearly 20% in mid-afternoon trading following an earnings report that showed surprisingly weak ad sales in Q3. The company reported net income of $2.3M, down 85.5% vs the same period last year, on revenues of $449.0M, -0.6%. Revenues were well short of Wall Street’s $479.2M consensus estimate. Operating costs ate up more than 98% of the revenues. Factoring out $6M in revenue from the About Group — which the Times sold to IAC/InterActive Corp in late September — the company’s continuing operations generated a loss of 2 cents a share. Analysts thought they’d see an 8 cent profit. The biggest disappointment was the 8.9% drop in advertising, to $182.6M, with declines in financial, entertainment, department stores, and real estate. The company says it expects little change in Q4 ad sales. The drop in ad sales offset a 7.4% gain in circulation to $234.9M — mostly from increasing digital subscriptions and price increases. Digital subs increased 11% from the end of Q2 to 592,000. The $300M sale of About “will allow us to enhance our focus on our core business of generating and distributing high-quality journalism,” CEO Arthur Sulzberger Jr. said.
The sex abuse/editorial scandal plaguing the BBC is starting to reach across the pond. Mark Thompson, the former head of the BBC and the incoming CEO of The New York Times Company, has reiterated to the newspaper that he was not aware of the BBC’s Newsnight investigation into sexual abuse allegations against late TV host Jimmy Savile until after the report was spiked. Thompson’s comments to the Times run in an interview that appears in today’s paper – a day after Times ombudsman Margaret Sullivan wrote, “How likely is it that (Thompson) knew nothing?” and suggested it was “worth considering whether he is the right person for the job, given this turn of events.”
A New York Times spokesman said, “Mark will join The New York Times Company as president and CEO the week of Nov. 12. We believe his experience and accomplishments make him the ideal person to take the helm of the Times Company as we focus on growing our businesses through digital and global expansion.” But Douglas Arthur, an analyst at Evercore Partners, has said it would be advisable to “delay” Thompson’s start until the situation shakes out in the UK. Independent reviews are underway at the BBC on the Savile allegations as they relate to the corporation and on the controversial killing of the Newsnight piece. Thompson’s successor, George Entwistle, was grilled on the matters for two hours yesterday by a parliamentary select committee.
Here’s an investment that’s paid off well for the publishing company: In 2005 The Times joined Union Square Ventures and Allen & Co to collectively spend $5M for a minority stake in Indeed, which aggregates Web job listings. Since then the site has taken off, surpassing Monster.com in hits among job seekers. Last year the Times sold part of its interest for $5.9M. The new deal will deliver the company’s stake to Japan’s Recruit Co, which specializes in classified ads. The Times expects to record its gain in Q4, it says in an SEC filing. Its stock is up 2% in early trading.
UPDATE, 10:06 AM: This may teach The Times to let lawyers make its big announcements. The company’s calling news organizations to clarify that the plan laid out in this morning’s SEC filing is voluntary: Former employees who are fully vested in the pension plan can elect to keep their current payments. That leaves the question: Why would anyone want to accept a lower amount — the assumption behind the company’s claim that this will reduce its obligations? The Times says that some people might prefer a lump sum now so they don’t have to keep track of payments.
PREVIOUS, 6:41 AM: This is “another step the Company is taking to reduce the size of its pension obligations and the volatility in the Company’s overall financial condition,” the New York Times says in an SEC filing this morning. It’s giving a choice to about 5,200 pension plan participants — who account for 15% of the liabilities. (Those total liabilities came to nearly $2B at the end of 2011.) By November 2 they must decide whether they want a one-time payment by year-end that equals the present value of their pension benefit, or accept “a reduced monthly annuity.” As a result of the change, the Times expects to take a charge on its Q4 earnings. The amount will depend on how many people take the lump sum payment, as well as the usual collection of assumptions that determine how …
Looking to combine The New York Times Company’s information portal About.com with its own question-and-answer service, Ask.com, Barry Diller’s IAC offered to acquire the About Group on Aug. 21. The NYT Co said Sunday it had agreed to sell the company, which also includes ConsumerSearch.com and CalorieCount.com, to IAC in an all-cash deal that is expected to close in the next several weeks. The NYT Co paid $410M for About in 2005, but its fortunes have soured against competition from Google. Nevertheless, NYT Co chairman Arthur Sulzberger, Jr. said Sunday, “About.com has been a strong contributor to our company since its acquisition. This sale will allow the Times Company to focus on the development and growth of our core brands locally, nationally and on a global scale.”
Mark Thompson will be collecting a lot less as the Times’ new CEO than his predecessor, Janet Robinson, did. The soon-to-be former Director-General of the BBC — he starts at the Times in November — will collect an annual salary of $1M, the company says in an SEC filing this morning. The board also targets a $1M annual incentive. To encourage him to leave the BBC, the Times awarded Thompson a sign-on bonus targeted at $3M. Half of it comes in an amount of stock that will be pegged to how well the Times’ does in the market compared to the benchmark Standard and Poor’s 500 in the period ending November 2015. He could get none of that $1.5M — or it could go as high as $3M. The remaining 50% of the sign-on bonus is in stock options that vest in three annual installments. In addition, Thompson is entitled to a relocation benefit of three months housing and a maximum of $100,000 plus up to $25,000 to reimburse his legal fees for negotiating the contract. By contrast, the compensation package for Robinson — who left the company in December — came to $11.3M last year, $5.3M in 2010, and $6.7M in 2009.
The venerable newspaper company has turned to a television exec with experience managing tight budgets to help lead its journey into the digital era. Mark Thompson, 55, has been Director-General of the BBC since 2004. He’ll relocate to New York and will start at The Times in November. He’ll also be a member of the company board and report to Chairman Arthur Sulzberger Jr. Thompson’s “experience and his accomplishments at the BBC made him the ideal candidate to lead the Times Company at this moment in time when we are highly focused on growing our business through digital and global expansion,” Sulzberger says. The Times has been looking for a CEO since December when Janet Robinson left. Since June the smart money has been betting that Thompson would land the job after the London Olympics. Thompson’s wife is American and speculation was that he would be eager to move to the U.S. Thompson has spent most of his career at the BBC except for a period when he was the chief of Channel 4.
Mark Thompson is set to leave his post as BBC director general after the London Olympics this summer. In the past month, he’s said to have had meetings about the chief executive job at The New York Times Company which has been vacant since Janet Robinson left in December, The Guardian reports. Thompson has spent most of his career at the BBC except for a period when he was the chief of Channel 4. He became director general of the BBC in 2004. Thompson’s wife is American and speculation is that he would be eager to move to the US. He’s not worked for a newspaper before, but gained experience as a journalist during his BBC career.
The New York Times Co.’s annual shareholder meeting today had some unexpected and uninvited guests — its own employees. Although they often have bylines on the machinations of Big Media, the New York Times editors and reporters weren’t covering today’s event — they were protesting it. According to the Newspaper Guild of New York, approximately 65 to 70 NY Times staffers formed “a silent gauntlet” in the lobby of the paper’s Manhattan building. They handed out leaflets with analysis by Times labor reporter Steven Greenhouse bemoaning the lack of a contract since March 31, 2011, the pension plan freeze the company is requesting of its staff as well as the present state of negotiations between the Guild and the New York Times Co. Arthur Sulzberger Jr. and other Times executives walked right past the protesters on their way to the meeting. Outside on the street, behind a big poster with “Without Journalists and Staff, The Times is Just White Space” written on it, other staffers also handed out Guild material. On its website the Guild posted the heart of its complaint: “The Times wants to freeze the pension plan, under-fund the health plan, and offered 0%, 1%, and 1% for wage increases, while giving the CEO A $24 MILLION DOLLAR SEVERANCE PACKAGE.” Must have been awkward when everyone went back to the newsroom.
Starting in April non-subscribers will only be able to see 10 articles, slide shows or videos a month for free, down from 20, the paper says this morning. If you want more, then you’ll have to buy one of The Times’ digital subscriptions. Now brace yourself for the caveats: Even if you’re past the limit, you can still see an article for free if you reach it via a search engine, or an email or blog link — but you can only see five a day from some unnamed search engines. The NYTimes.com home page and section fronts also will be free to browse. Smartphone and tablet users will be able to see top news stories for free — but will have to subscribe to see anything else.
The Times tried to spin the news as sign of how well it’s doing in the digital world. One year after it erected its pay wall, the paper has 454,000 paid digital subscribers. “We knew that readers placed a high value on our journalism, and we anticipated they would respond positively to our digital subscription packages,” Chairman Arthur Sulzberger Jr says. Still, he has a lot riding on his ability to nudge online readers to pay — without giving print customers an incentive to switch to a lower-priced digital-only subscription.
Bloomberg smartly notes that former New York Times CEO Janet Robsinson’s $24M bundle in 2011 was “equal to about 2.4% of the company’s market value of $981.9 million, and exceeds the approximately $3 million the company earned in net income over the past four years.” The company’s proxy statement, out today, says Robinson — who left at the end of 2011 — had an $11.3M compensation package last year ($1M salary, $767,533 in stock awards, $797,185 in option awards, $3.6M in non-equity incentives, $523,898 in deferred compensation and $4.6M in other compensation). That’s up 113.2% vs 2010, but includes in “other compensation” a $4.5M fee so the company can call on her as a consultant this year. On top of her compensation, Robinson is entitled to about $11.4M in retirement benefits. Her exit deal includes a “two-year non-competition, non-solicitation and non-disparagement covenant, a three-year cooperation covenant and an indefinite confidentiality covenant.” The company lauded her “leadership during recent challenging years and other significant accomplishments during her 28-year tenure with the Company” including the development of its digital strategy. It doesn’t hold her responsible for the 22.4% drop in the Times’ market value in 2011, or the 80% drop since she became CEO in late 2004.
Arthur Sulzberger Jr will become interim CEO until the newspaper company can find someone else to take on one of the most thankless jobs in media. While The New York Times Co has managed its transition to the digital world better than just about any other newspaper company, it’s still a newspaper company. And as that industry has faded, so have its profits and prospects. The New York Times’ market value is down 23% so far in 2011 — and down 69% since the end of 2006. Still, Robinson leaves with a sweet deal. She’ll be paid $4.5M over the next year to serve as a consultant on what the company calls “an as-needed basis.” But she can’t compete with the Times, hire away its employees, or bad-mouth the company for three years. Here’s the company’s release:
NEW YORK–Dec. 15, 2011– The New York Times Company (NYSE: NYT) announced today that Janet L. Robinson, 61, president and chief executive officer since 2004, will retire on December 31, 2011. Arthur Sulzberger Jr., currently chairman of the Company and publisher of The New York Times, will serve as chief executive officer on an interim basis. Ms. Robinson also will step down as a director of the Company on December 31, 2011. She has agreed to serve as a consultant to the Company for one year.
The trading day ended with a thud. The benchmark Standard & Poor’s 500 wound up -2.1% as word spread that Germany might balk at a proposal to help bail out debt-laden members of the European Union including Greece and Portugal. That affected media stocks; the Dow Jones U.S. Media Index fell 3%. Disney was the hardest hit among the Big Guns, with shares off 3.2%. It was followed by News Corp (-3.1%), CBS (-3%), Comcast (-2.9%), Time Warner (-2.7%), Viacom (-2.3%), and Sony (-2.1%). Newspaper companies were big losers led by McClatchy (-10%), New York Times (-7.3%), E.W. Scripps (-6.5%), and Gannett (-6.3%). But others weren’t far behind: Cablevision (-6.1%) hit a 52-week low. The losers list also included Crown Media (-6.6%), AOL (-5.9%), DirecTV (-4.7%), Live Nation (-4.4%), Barnes & Noble (-4.3%), TiVo (-4.2%), Sirius XM (-4.2%) and Dish Network (-4.2%). Today’s few gainers were led by Coinstar, up 7.8% on a report that its Redbox unit will team up with Verizon to offer an online video service. Martha Stewart Living Omnimedia was up 1.7% the day after J.C. Penney said it bought 16.6% of the company. And Madison Square Garden was up 1.7%, hitting a 52-week high, after Morgan Stanley’s Benjamin Swinburne changed his recommendation to “overweight” from “underweight” following the resolution of the NBA lockout.
The benchmark Standard & Poor’s 500 was up 4.3% today after central banks in the U.S., Europe, and Japan said that they’d help supply cash to avoid a credit crunch if the European debt crisis worsens. That buoyed media stocks: The Dow Jones U.S. Media Index was up nearly 4.4%. CBS shares rose 5.8%, giving it the biggest bump among the elite group of Big Media companies. It was followed by Disney (+5.4%), News Corp (+5.4%), Time Warner (+4.3%), Viacom (+4.3%), Comcast (+4.2%), and Sony (+2.7%). Among other media companies, Westwood One and The New York Times were up more than 10%. Companies up more than 9% include Outdoor Channel, LIN TV, and Entercom. Only a few companies lost ground. The hardest hit was Netflix, down 4.5% after Wedbush Securities’ Michael Pachter downgraded the video rental firm to “underperform” from “neutral.” His rationale: “We think that the company’s pricing structure is wrong, and its business model is broken. At current prices, we expect Netflix to continue to lose more hybrid (DVD and streaming) customers than it adds, and those who remain will not be particularly profitable.”