New York Times considers asset sales ahead of difficult 2009
NEW YORK - The New York Times Company said yesterday it is considering potential asset sales ahead of one of the "most challenging years" for the newspaper industry.
The publisher sought to reassure investors that it could "weather the challenges" brought on by the recession.
Its announcement came a day after major US newspaper publisher Tribune, owner of the LA Times and the Chicago Tribune, filed for Chapter 11 bankruptcy after struggling to operate with $13bn (£8.8bn) of debt.
Janet Robinson, president and chief executive of The New York Times Company, said: "Like others in our industry and, in many businesses across America, we have seen the softness in the economy become more pervasive in the last several months.
"In November, the rate of change in advertising revenue declined from what we saw in October.
"There is no doubt that 2009 will be among the most challenging years we have faced and more steps will be needed.
"We believe that through our revenue initiatives, expense cuts and the steps we are taking to improve our financial flexibility, the Times Company is well positioned to weather the challenges next year is expected to bring."
The company said it will continue to evaluate its assets, which include The New York Times, The Boston Globe, About.com, and a minority stake in the Boston Red Sox baseball team, but noted that the feasibility of asset sales at this time is uncertain given the current market and credit environment.
James Follo, senior vice-president and chief financial officer of the New York Times Company, said: "It's incumbent upon us to make sure that we carefully evaluate our properties to determine if they remain a strategic fit and, given the outlook for the business and their financial performance, make sense to continue to be a part of the company."
The company said it is in discussions with its lenders regarding debt maturing in 2009 and 2010 and has no intention and "no need" of fully replacing the $400m credit facility expiring next year as its total borrowing need is projected to be significantly less than $800m.
The company also plans to raise up to $225m through the sale and leaseback of a portion of its New York headquarters and will use the proceeds to repay existing long-term debt.
Separately, US newspaper publisher McClatchy also said yesterday that it would work to reduce debt in 2009.
McClatchy, which bought rival US newspaper firm Knight Ridder in 2006, owns 30 daily newspapers, including the Anchorage Daily News, Idaho Statesman, The Wichita Eagle and The Kansas City Star.
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