Corporate annual meetings are generally drowsy affairs—a pep talk by management, some PowerPoint graphics, a little predetermined voting, all topped off by a parade of cranks to the microphones to excoriate management about their pet causes. April’s annual gathering of shareholders in The New York Times Company certainly featured all of those ingredients, down to the codger who shuffled in late, grabbed the seat next to mine, and promptly dozed off.

But beneath the surface routine there was an undercurrent of tension. Shareholders in the Times Company have been taking it on the chin recently, to say the least. In the five years between 2003 and the end of 2007, the Times’s stock lost about two-thirds of its value before rebounding slightly this year. As with most newspapers, daily circulation has been steadily eroding for years, dropping about 4 percent in the six months before the meeting. Sunday circulation has done even worse, declining almost 10 percent in those same six months.

The company’s “challenging” (to use CEO Janet Robinson’s word) first quarter of 2008 pointed to an even bumpier road ahead as the economy softens. Some bright spots poke through the gloom, but company-wide revenue was down about 9 percent year-over-year, with newspaper classifieds free-falling almost 23 percent compared to the first quarter of 2007. Despite the steep decline in the Times’s stock, an April report by media analyst Paul Ginocchio at Deutsche Bank concluded it was still overpriced: “We believe NYT’s valuation has been inflated well above fundamental levels, and continue to see a near-term selling opportunity,” his report said.

As a result of these difficulties the company has taken some aggressive steps, notably cutting the newsroom head count at the flagship paper, a move that Arthur Sulzberger Jr., publisher and chairman, had long sought to avoid. Management has also pledged to make $230 million in spending cuts across the company by the end of 2009, partly by moving more business operations offshore. Despite these measures, in late April, Standard & Poor’s lowered the company’s debt rating to BBB-, one notch above junk-bond status. A week after that downgrade, Bill Keller, executive editor of The New York Times, circulated a memo noting that, because the company had failed to get enough voluntary buyouts, it would have to resort to layoffs. “We hope that the worst is now behind us,” Keller wrote to his staff. When I asked Sulzberger whether Keller’s hope was justified, he said, “The memo speaks for itself. We have no reason to anticipate more cuts, but we cannot predict what the future holds.”

The company’s financial problems are hardly unique in the print world; no one has yet solved the challenge to newspapers posed by the digital revolution. Still, the pall hanging over the annual meeting seemed especially striking given the setting, the sleek new TimesCenter, a 378-seat auditorium appended to the company’s new fifty-two-story Renzo Piano-designed headquarters, a building that cost the company about $600 million. The Times Building is just one of several big outlays the company undertook in recent years, even as its financial fortunes worsened. From 2003 through 2006, the company spent hundreds of millions buying back its own stock only to see its value steeply depreciate. Last year, it chose to substantially raise its cash dividend to shareholders, a principal source of income for members of the Ochs-Sulzberger family that controls the company.

Despite pressure from large shareholders, Times management has also been reluctant to shed some of its under-performing assets, such as The Boston Globe, which the company acquired in 1993 for $1.1 billion, a price that many critics called absurdly high even at the time. That judgment was vindicated last year when the company had to absorb a painful $814 million write-down on the Globe deal and a later acquisition of the Worcester Telegram & Gazette.

Douglas McCollam is a contributing editor to CJR.