The New York Times Company (NYT), a diversified media company, recently declared the sale of a portion of its minor stake in New England Sports Ventures (NESV) to Henry F. McCance, Chairman of Greylock Partners, a venture capital firm.
The New York Times Company sold 50 of its 750 units held in NESV that owns the Boston Red Sox, Fenway Park and other sports properties. The deal whose terms were not disclosed has lowered the company’s stake in NESV to 16.6% from 17.8%, which it had bought in 2002 for $75 million.
The company also hinted at its intention to sell the remaining stake in NESV. The sale of the entire stake will help The New York Times Company to alleviate near term liquidity concerns to some extent. The company has also been paring its cost structure, and looking for potential avenues to raise cash and lower debt, which stood at $769.2 million at fiscal-end 2009.
The publishing industry has long been grappling with sinking advertising revenue, and the recent global economic meltdown has worsened the situation. This comes in the wake of a longer-term secular decline as more readers choose to get news for free on the Internet, thereby making the print-advertising model increasingly irrelevant.
Although the U.S. economy is witnessing signs of recovery with a sluggish improvement in the advertising environment, we believe 2010 will not mark the resurrection of the publishing industry. However, it is expected to fare better than 2009, as steps taken to curb the mayhem will start paying off.
Newspaper companies are now even considering charging visitors for accessing articles online. News Corporation (NWSA), the media conglomerate, has taken a leap towards an online subscription-based model for general news content. News International, the subsidiary of News Corporation will soon begin charging readers for online content for The Times of London and Sunday Times of London, effective June 2010.
The New York Times Company plans to introduce a ‘pay and read’ model for NYTimes.com in 2011. The company will adopt the Financial Times’ metered system, where readers after browsing a certain number of free articles are asked to subscribe.
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