The New York Times to the Atlantic: Kiss My Grey Pucker

Did Michael Hirschorn's article for The Atlantic on the fiscal disaster perhaps awaiting The New York Times hit some kind of nerve?

I blogged briefly about Hirschorn's article here -- and I'd really like to see the blogosphere, in particular the arts-centric blogo- and theatrosphere, begin kicking around how our community would be affected if the Times did fall into Chapter 11 and/or wound up operating on a Web-only model someday down the road. Does it thrill me? No, of course not -- I'm a traditionalist. I love the feel of a newspaper in my hand, of newsprint on my fingers. But Hirschorn carefully and, I think, daringly explores the Times abandoning print as a scenario. As for accuracy, well...

Hold on! says Catherine Mathis, senior vice president of corporate communications, who posted a letter on Romanesko attempting to refute Hirschorn. Here's the meat of the matter:

Your article refers to the paper's credit crisis (never mind the fact that the debt is at the corporate level). We disagree with that characterization. Here's our situation.

We have two revolving credit agreements.

These are agreements with banks that allow us to borrow up to $400 million under each agreement, or $800 million in total, whenever we need it. We repay what we have borrowed as cash comes in and the amount we can borrow is then replenished.

One of our agreements will expire in May 2009 and the other in June 2011.

As we have said publicly on more than one occasion, because we believe we need significantly less than the total $800 million available credit, we do not plan to replace the full $400 million that is expiring in May. There is no need to do so.

We have not already borrowed money against our building's value as your article states. Rather we are in the process of pursuing a sale-leaseback for up to $225 million for some of the space we own in our headquarters building.

The proposed transaction for our building gives us the right to buy back the space at the end of the lease. In the meantime, we would continue to occupy our headquarters. We plan to use the proceeds from the sale-leaseback to repay some of the long-term debt we currently have. So the sale-leaseback would not add to the debt of the company, but rather is a way to refinance some of our existing debt. We have chosen to pursue this form of transaction because it is one of the less expensive forms of borrowing in this difficult credit market.

While credit markets remain tight, we have been talking with lenders and, based on our conversations with them, we expect to get the financing to meet our obligations when they come due. And please remember, we continue to generate good cash flow from our operations.

With regard to the specific point made about the demise of the print edition of The Times in May, it may make for a good a story but it is poor analysis. We have 830,000 loyal readers who have subscribed to The New York Times for more than two years, a number that has increased by about a third over the past decade. They like reading the print edition and pay a substantial amount of money to do so. That's not to say they don't visit NYTimes.com or read our journalism on their mobile devices. They do. But they would be unhappy if they couldn’t pick up a print copy. And since it's profitable for us to print these copies, we will continue to do so.

Smackdown! Yes it is -- one that is starting to be examined by mainstream outlets focusing on media, such as Editor and Publisher and FishBowl NY.

Do check out, by the way, Felix Salmon's take-down of Hirschorn's piece at Conde Nast Portfolio.

Now the question: Who is right?

Personally, I think the most interesting commentary about Mathis' letter is on FishBowl:

Nothing earth shattering there. Though ("warranting" aside) one wonders why the Times felt the need to respond at all since it was pretty clear from the get that Hirschorn's piece was mostly intended to be a conversation starter — even in this uncertain environment no one really believes that the Times will cease printing in five months (even those of us who never see it in print!). What is also of particular interest is that they waited a week and then chose this forum. Or maybe this is all just evidence they are beginning to smart a little from all the doom-and-gloom coverage of late.

And then there is the tone of the Times' response — it's a bit tongue-in-cheek (similar to, dare we say it, a blog post!) and it's posted on a media website as opposed to say, being sent to The Atlantic to be printed in the next issue. The whole interaction in fact resembles exactly sort of back and forth posting and linking that is common in online world conversations.

What do you think?

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Put These Together: Chapter 11, New York Times

I bet you're all just thrilled with my endless doom and gloom, especially when you see the titles of blog posts like "Put These Together: Chapter 11, New York Times."

But I read this article, by Michael Hirschorn, in The Atlantic, called End Times, and it's really quite sobering and provocative.

In essence, Hirschorn states his hypothesis in the first four graphs:

Virtually all the predictions about the death of old media have assumed a comfortingly long time frame for the end of print—the moment when, amid a panoply of flashing lights, press conferences, and elegiac reminiscences, the newspaper presses stop rolling and news goes entirely digital. Most of these scenarios assume a gradual crossing-over, almost like the migration of dunes, as behaviors change, paradigms shift, and the digital future heaves fully into view. The thinking goes that the existing brands—The New York Times, The Washington Post, The Wall Street Journal—will be the ones making that transition, challenged but still dominant as sources of original reporting.

But what if the old media dies much more quickly? What if a hurricane comes along and obliterates the dunes entirely? Specifically, what if The New York Times goes out of business—like, this May?

It’s certainly plausible. Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company’s debt was recently reduced to junk status), the paper’s future doesn’t look good.

“As part of our analysis of our uses of cash, we are evaluating future financing arrangements,” the Times Company announced blandly in October, referring to the crunch it will face in May. “Based on the conversations we have had with lenders, we expect that we will be able to manage our debt and credit obligations as they mature.” This prompted Henry Blodget, whose Web site, Silicon Alley Insider, has offered the smartest ongoing analysis of the company’s travails, to write: “‘We expect that we will be able to manage’? Translation: There’s a possibility that we won’t be able to manage.”

Hirschorn does fine reporting here, but then he goes on to imagine a world without the Times, or at least a world without a print edition of the Times and/or a world in which the Times is bought by scavangers (he suggests everyone from Rupert Murdoch, naturally, to the folks at Google), "stripped for parts," and turned into a "content mill" to "goose" page views.

This paragraph in particular interested me because Hirschorn removes the specter of hundreds of journalists losing their jobs at the Times from the discussion -- it's a wise move because if you love the Times, you'll freeze in horror at the thought, and if you hate the Times, you'll have a bit of schadenfreude curling the corners of your mouth up into a smile. I belong to the former camp and the way he describes a post-Times world is just heartbreaking:

The collapse of daily print journalism will mean many things. For those of us old enough to still care about going out on a Sunday morning for our doorstop edition of The Times, it will mean the end of a certain kind of civilized ritual that has defined most of our adult lives. It will also mean the end of a certain kind of quasi-bohemian urban existence for the thousands of smart middle-class writers, journalists, and public intellectuals who have, until now, lived semi-charmed kinds of lives of the mind. And it will seriously damage the press’s ability to serve as a bulwark of democracy. Internet purists may maintain that the Web will throw up a new pro-am class of citizen journalists to fill the void, but for now, at least, there’s no online substitute for institutions that can marshal years of well-developed sourcing and reporting experience—not to mention the resources to, say, send journalists leapfrogging between Mumbai and Islamabad to decode the complexities of the India-Pakistan conflict.

There are, sitting in my parents house, photos of me at age 4 or 5, in a green jumpsuit and wearing my mother's glasses and pretending to read the Times. There are other photos of me, perhaps slightly older, sitting at a little stack table pretending to be doing the crossword. When I was a kid, especially as a teenager, some of my favorite memories of my mother's parents -- my grandfather in particular -- involving watching them finish the Sunday Times crossword in about an hour or so. The Times is a cultural, social and political institution is what Hirschorn seems to be saying, and certainly Americans have a gift for allowing its most precious institutions to fall into disuse and death.

Two more graphs from Hirschorn's story are worth pondering, as he makes a stab at trying to explain the Web-monetization problem in a way that makes sense, both in terms of the number of jobs a Web-only journalism product can support, and how utterly screwed up journalism has become financially as a result of the Web. First graph:

Most likely, the interim step for The Times and other newspapers will be to move to digital-only distribution (perhaps preserving the more profitable Sunday editions). Already, most readers of The Times are consuming it online. The Web site, nytimes.com, boasted an impressive 20 million unique users for the month of October, making it the fifth-ranked news site on the Internet in terms of total visitors. (The October numbers were boosted by interest in the election, but still …) The print product, meanwhile, is sold to a mere million readers a day and dropping, and the Sunday print edition to 1.4 million (and also dropping). Print and Web metrics are not apples-to-apples, but it’s intuitively the case that the Web has extended The Times’ reach many times over.

And the second graph:

What would a post-print Times look like? Forced to make a Web-based strategy profitable, a reconstructed Web site could start mixing original reportage with Times-endorsed reporting from other outlets with straight-up aggregation. This would allow The Times to continue to impose its live-from-the-Upper-West-Side
brand on the world without having to literally cover every inch of it. In an optimistic scenario, the remaining reporters—now reporters-cum-bloggers, in many cases—could use their considerable savvy to mix their own reporting with that of others, giving us a more integrative, real-time view of the world unencumbered by the inefficiencies of the traditional journalistic form. Times readers might actually end up getting more exposure than they currently do to reporting resources scattered around the globe, and to areas and issues that are difficult to cover in a general-interest publication.

So what do we think are the chances this will come to pass? Let's discuss.

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