The New York Times (NYT) is beating the odds in the newspaper business. To explain, The New York Times’ revenues and subscriber numbers are growing as the newspaper industry shrinks.
For instance, The New York Times’ revenues grew by 11.47% in the quarter ending on 30 June 2022, Stockrow estimates. However, the revenue growth fell from 23.47% in the quarter ending on 30 June 2022. Furthermore, the NYT’s quarterly revenues grew from $498.50 million on 30 June 2021 to $555.68 million on 30 June 2022.
Similarly, the number of paid New York Times digital subscribers grew from 799,000 in the first quarter of 2014 to 6.14 million in the second quarter of 2022, Statista estimates. Conversely, The New York Times claimed to have 9.17 million paid digital and print subscribers on 3 August 2022.
Impressively, the NYT claims have added 180,000 net digital only subscribers in the second quarter of 2022. However, the Times admits digital advertising revenues fell in the second quarter of 2022. Arrogantly, The New York Times has a goal of acquiring 15 million paid subscribers by the end of 2027.
The Incredibly Shrinking Newspaper Industry
Hence, The New York Times (NYT) is avoiding the typical American newspaper’s fate. For example, Pew Research estimates US weekday newspaper circulation fell from 44.421 million in 2011 to 24.299 million in 2020. If Pew is correct, US newspapers lost 20.122 million readers in nine years.
Consequently, two US newspapers are closing each week, The Washington Post claims. Notably, around 2,500 daily and weekly newspapers closed between 2005 and 2022.
Newspapers are dying because they cannot make money. Newspaper revenues fell from $50 billion in 2005 to $20 billion in 2022, Northwestern University’s Medill School estimates. Similarly, US newsroom employment fell by 70% in the same period.
Fake Free Newspapers Proliferate
Destructively, newspapers now have free competition from wealthy special interests. A left-wing group called the American Independent Foundation is publishing free “newspapers” to support Democratic candidates in several candidates, The Washington Post claims.
The American Independent Foundation mails 3.2 million newspapers to households in several states. One of those “newspapers” The Pennsylvania Independent has a circulation of 953,000 and is the Keystone State’s most widely circulated “newspaper.” Around 1.1 million households in Michigan, 600,000 households in Ohio, and 600,000 households in Wisconsin receive the Foundation’s newspapers. The Foundation is a left-wing dark money group that does not reveal the source of its money.
The Independent mixes Associated Press wire service articles with local news and Democratic Party propaganda, The Washington Post reports. The American Independent Foundation has $28 million to spread its propaganda.
A conservative organization publishes The Grand Canyon Times a “newspaper” in Arizona that supports Republican US Senate Campaign. Disturbingly, a political action committee (PAC) the Saving America PAC finances The Grand Canyon Times. Note: Saving America PAC resembles former President Donald J. Trump Sr.’s (R-Florida) Save America PAC. However, I cannot tell if there are connections between the two organizations.
I think efforts like The Independent and The Grand Canyon Times could kill legitimate newspapers by offering free alternatives. Unfortunately, the political operatives behind such propaganda will not care as long as their “messages” reach voters.
Frighteningly, I think the political papers could spawn similar propaganda efforts to promote specific products. For example, a fake newspaper to promote medical marijuana or a specific retail store.
Is the New York Times Making Money?
The New York Times Company (NYT) is making some money from digital subscriptions.
For example, The Times’ quarterly gross profits grew from $232.65 million on 30 June 2021 to $234.39 million on 30 June 2022. Conversely, the quarterly operating income fell from $73.28 million on 30 June 2021 to $51.66 million on 30 June 2022.
Similarly, the quarterly operating cash flow fell from $77.50 million on 30 June 2021 to $30.81 million on 30 June 2022. Plus, the quarterly ending cash flow fell from $45.27 million on 30 June 2021 to -$7.81 million on 30 June 2022.
Consequently, The New York Times’ cash and short-term investments fell from $660 million on 30 June 2021 to $223 million on 30 June 2022. Thus, the New York Times is making less money.
What Value Does the New York Times offer?
The New York Times added a little value over the past year. For instance, the total assets grew from $2.469 billion on 30 June 2021 to $2.513 billion on 30 June 2022.
Additionally, The New York Times has less debt. The net debt fell from -$682 million on 30 June 2021 to -$223 million on 30 June 2022. The NYT only reported $73 million in total debt on 31 December 2021.
Thus, I think Mr. Market fairly priced the New York Times (NYT) stock at $29.25 on 21 October 2022. The stock price fell from $53.97 on 18 October 2021.
The New York Times will pay nine 9₵ quarterly dividends between 21 October 2022 and 22 October 2024. Overall, The New York Times Company (NYT) offered a 36₵ forward dividend and a 1.23% forward dividend yield on 21 October 2022.
The New York Times will Struggle to Survive
Hence, The New York Times offers a little value, but it is struggling to make money. Notably, The Times is struggling in one of America’s most liberal and literate cities: New York. Hence, I’m skeptical of the growth to 15 million subscribers however, the subscriber base has grown.
In particular, I think the spread of propaganda outlets such as The Independent will drive some readers to The New York Times. Yet, I believe the market for the Times’ products is limited to an educated elite. However, that elite is affluent.
My prediction The New York Times will stay at around 10 million subscribers and struggle to make money. Yet The Times is an interesting company because it is surviving, growing, and making money in a dying industry.
