Editor & Publisher has the details: 500 total job cuts at The New York Times Company, including 45 newsroom positions at The New York Times, and 35 newsroom positions at The Boston Globe.
I believe there will be more layoffs and financial problems at The Times Company in the next few years, not only because of problems in the news operations at The New York Times and The Boston Globe, but also because the About.com acquisition earlier this year will, barring an unforeseen breakthrough, take a heavy toll at some point on the company’s reported profits.
The Newsroom Problems Continue
I chronicled the Times Company’s problems with its flagship newspaper extensively here in mid-July, and had a piece in early August pointing to three big errors or omissions the paper committed in just one weekend.
Since then, things have only gotten worse:
- Making hash of the recount rehash–Time Economics columnist Paul Krugman spent the better part of three weeks first essentially contending, then defending, the notion that Al Gore would really have won Florida in the 2000 election if all the votes had been counted fairly.
Memo to Paul Krugman: Bush won, Gore lost. Subsequent exhaustive studies by media consortia that included The Times concluded that Bush would have won using 3 of the four counting methodologies for counting ballots. Bush’s margin in the three methods showing him ahead ranged from 363 to 1,665 votes. In the one instance where Gore would have “won,” using the method he actually least favored, his margin was 3 votes, which was, per USA Today “too small to conclude that Gore might have prevailed in an official count using this standard.”
Further, these recounts did not consider a few thousand excluded military ballots, the large majority of which would have gone to Bush had they been counted.
Along the way, Krugman made other absurd assertions too numerous to mention here. But the bigger question is this: What in the world was the Times’ economics columnist doing refighting a 5-year old battle?
- Krugman has at the same time managed to create another calamity over The Times’ correction process. His varying claims over 2000 voting have gotten so confusing that The Times has had a difficult time running accurate corrections, or even forcing him to acknowledge that corrections are needed. As noted by Don Luskin at PoorAndStupid.com, Public Editor Barney Calame even called out Krugman and his employer on their failure to post full and accurate corrections…. and nothing has happened (actual NYT link appears to be behind their new subscription wall).
- The Air America Radio scandal coverage blackout continues–The Times is getting scooped again and again in its own back yard on this story, and as a result its credibility as a reliable local and national news source continues to melt away.Four different news sources have built up this story for the past eleven weeks, none of them names The New York Times:
- The Gotham Community Gazette (second item at link) broke the original story about the Gloria Wise “loans” to Air America way backon July 5.
- The New York Daily News reported on the programs for seniors and children that were salvaged on July 26 by transferring the programs and services involved from the financiall on the brink Gloria Wise to other agencies.
- That
high-flying media conglomerate temporary alliance of bloggers Brian Maloney (his Sept. 20 on AAR is here) and Michelle Malkin (her Sept. 15 piece is here) has been exposing a near-mountain of court records and other evidence, all of which point to not only wider knowledge of the Gloria Wise “loans” on the part of both AAR management and top host Al Franken, but also frantic efforts to pull off, as Brian characterizes it, “the ultimate in corporate CYA.”
- Finally, The New York Sun (their latest from Sept. 20 is here), the feisty right-of-center newcomer, has been moving the story ever since Brian started the national ball rolling in July.
Meanwhile The Times has been in total snooze mode on this story. Times web site searches (require registration) on “Air America” and “Gloria Wise” show that the paper has published nothing about the scandal since August 12. Even that perfunctory piece required a Michelle Malkin-driven correction on August 13.
I’d be tempted to resend these directions for the 1.5-mile trip from The Times to Air America’s headquarters The Times originally received in early August, but with the 45 newsroom job cuts, there probably isn’t anyone available to go there.
About.com: Did The Times Company Get Taken to the Cleaners?
But even if The Times Company straightens out the messes at its two main newspapers (there are similar problems at The Boston Globe too numerous to mention here), and even it is successful in its $50 per year Times Select service that began on September 19, it faces a new problem: It appears to have way, way overpaid for its purchase of About.com earlier this year, and, if true, it will eventually have to face the accounting and financial music.
According to The Times’ June 30 quarterly financial statement (the “10-Q” report submitted to The Securities and Exchange Commission), the company paid $410 million for About (”an Internet property providing information on various topics of interest”), or $343 million more than its identifiable value consisting principally of content and customer lists. That $343 million is being carried as Goodwill (see pages 7 and 13 of the document), and will only continue to have value if About generates sufficient revenue and income to justify the valuation.
Well, the first full quarter of results for About as a Times-owned entity have been disclosed. Excuse me if I’m not blown away (see page 20 of the document):
- Revenue: $12.0 million (almost all “from the sale of advertisements (display and cost-per-click advertising”)
- Operating profit: $2.5 million (note that this is BEFORE shared administrative and management costs)
They’re kidding, right? They paid $410 million for a roughly $50 million annual revenue stream and about $10 million in annual profit before the expense of overseeing the operation? What in the world were they thinking?
The Times appears to be banking on the idea that About will generate a great deal more ad revenue over time and that there will be some kind of synergy between its newspapers and About’s content. This is a dubious bet. Blogs and other web sites are taking in much of the new web ad revenue. About seems from here to be a tired set of self-help sites that are nice to have around, but that don’t have the ability to generate passionate user loyalty the way that blogs, forums, and similar sites do. It seems unlikely to me that highbrow Times readers will click over to About sites for personal improvement and other information.
What I believe is likely to happen with About: A big writedown or perhaps a complete writeoff of that $343 million in Goodwill in 2-3 years, once it becomes clear that About will never be the cash generator or synergistic partner The Times somehow thought it would be.