John Ransom

The common stock of the New York Times (NYSE: NYT) plunged from $10.87 last week to a close of $8.19 on Friday after the liberal mouthpiece announced that its 3rd quarter net income dropped 85 percent.

While analysts are blaming soft advertising revenues, I think something more ominous is happening at America’s national, bleeding-heart newspaper.

(Editor's note: I'm taking a few days off. I'll see you guys again on Tuesday with a crop of Email and Hate Mail)

For sure, advertising revenues are dropping nationally as economic conditions have deteriorated over the last two quarters.

Newspapers in general are struggling still as advertisers turn more money over to digital. Unlike newspaper display ads, which are just dead print on a page, digital ads can measured. Advertisers like that, a lot. 

But still advertising revenues for the NYT are plunging in industries where we have been told by no less an authority than –gasp!- the New York Times: “Hurray! The recovery is finally on its way!”

If the economy is improving- as the publisher would have us believe- the rest of the paper’s operations didn’t get that memo.      

“[T]he lack of business confidence is growing in many, many segments, financial being one of them,” said the Times’ Chief Advertising Officer Denise Warren, according to Poynter.org. “Entertainment was down due to a lack of major releases in the quarter. Department stores had weak retail sales performance, so that impacted us. And then real estate is down, mostly due to the lack of new development in the New York market.”



Retail, Finance and Real Estate are experiencing lack of “business confidence,” as are “many, many segments” say the business folks behind the Times.  

You wouldn’t know it if you read the pages of the Times, however. On the editorial side- as opposed to the advertising folks who have to pay the salaries for the editorial folks- they think things are improving in our economy.

“Rise in Household Debt Might Be Sign of a Strengthening Recovery,” says the Times. “Hard-Hit Cities Show a Housing Rebound”; “The Perils of Feeding a Bloated Industry”- the bloated industry being financial services. “Barack Obama for Re-Election,” say the editors.    

But besides using the economic disconnect between editorial and ads as a cheap shot at the questionable content of the New York Times, there is a real-life point.

Even as economic conditions continue to deteriorate, the Grey Lady refuses to acknowledge the obvious: Obama’s policies are responsible for the worst post-recession performance since the 1930s.   

“President Obama has shown a firm commitment to using government to help foster growth,” says the Times. “He has formed sensible budget policies that are not dedicated to protecting the powerful, and has worked to save the social safety net to protect the powerless.” I don’t know how they wrote this without laughing or crying.

The rest of the editorial reads like a desperate suicide note as well, or least a desperate plea for a death panel to decide the fate of the New York Times.

They even go so far as to label Mitt Romney “dangerous.”

“Mitt Romney offers dangerous ideas,” continues the editorial, “when he offers any.”

Mitt Romney is about as dangerous as a cold cup of decaffeinated coffee.

But still Mitt brings more experience in running any one thing on his resume than Obama brought to the presidency taking all of his experience combined.  

The New York Times, on the other hand, has been a hit parade of bad and reckless ideas for four years. And they have even taken the trouble to list them out for us in their editorial “Barack Obama for Re-Election.”  

They are for the ballooning deficit; they are for more stimulus; they are for the codification of Too Big to Fail as expressed in Dodd-Frank; they want to raise taxes, but let the Bush tax cuts expire. They want more money for bad real estate debt; they think the most important right to defend now is the right to abort under any circumstances.  

If you had a playbook to deepen our fiscal crisis and keep our economy on artificial respiration, the Times editorial in support of Barack Obama would read as the narrative description.

They even go so far as to say that not only did Barack Obama kill Osama Bin Laden, he also “ended the war in Iraq.”

Really? There are a half a million fighting men and women who would dispute that notion.

When you wonder what happened to the greatness of our country you have to first start with awful financial performance of the Times over the last decade. There might be a connection between their plunging profits and their plunging standards.    

I suspect that the Times resents the free market where readers get to decide on their own that they’d rather watch Fox News than read the New York Times.

But advertisers don’t resent it at all. They like that kind of market a lot.  

So, yes; soft advertising revenues are part of the problem at the New York Times.

But the bigger problem at the Times is soft thinking.        


John Ransom

John Ransom is the Finance Editor for Townhall Finance.