NYT's Full-Year Profit of $19.9 Million: Better Optics
The psychology of profit is important, and the New York Times managed to get over the line, just barely for 2009. Pulling in 4Q profits of $90 million, it finished the year $19.9 in the black. The pain in getting there is dramatic: $475 million in expense cuts in one year or 17 percent, and that’s on top of previous cuts. After losing about $58 million in 2008, consider this slender profit a little reprieve. The Times can once again say it is profitable, and build from here, a clearly reduced here, given that ad revenues are still in decline. Profitability here, as elsewhere in the industry, has been achieved only by draconian cost cuts. News-related ad revenues grew in local single digits, while the About group is the growth leader; unfortunately, it contributes just 5% of company revenues, as the company remains tied to the news business for its fortunes. As I noted last week, Avatar itself will earn News Corp hundreds of millions of dollars, while the Times tries to dig out of a hole with little cushion to rely on.