A tale of two companies: NYT profits while Tronc considers sale

Despite the president’s regular protests to the contrary, The New York Times is not “failing.” The Times announced Wednesday that it added 109,000 new digital-only subscriptions in the latest quarter, contributing to a rise in revenue from subscribers that more than offset declines in advertising. The paper now boasts 2.9 million digital-only subscribers; add print, and total subscribers number 3.8 million.

Less than a decade after serious questions over whether it would survive, the Times has executed a financial turnaround that places it on solid footing going forward. It has built a subscription base that now accounts for nearly two-thirds of the company’s total revenue, and has integrated new offerings, like the podcast The Daily and the review and recommendation website Wirecutter.

RELATED: The Fourth Estate shows how far The New York Times has come

Out in Chicago, the picture is less positive. The Chicago Tribune’s Robert Channick reports that the paper’s parent company, Tronc, is considering selling its newspaper holdings to a private equity company. After years of mismanagement, Tronc recently completed the sale of the Los Angeles Times and San Diego Union-Tribune to billionaire Patrick Soon-Shiong. Last month, it slashed the staff of the New York Daily News by around 50 percent. Channick reports that a bid of between $19 and $20 per share is on the table, representing a total offer that could be upward of $700 million for the entire company.

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Tronc’s management of its papers has been continually marked by a lack of coherent strategy, absence of communication, and rounds of layoffs. The sale of the LA Times earlier this year was preceded by a contentious unionization battle with the paper’s staff, and in March, Michael Ferro stepped down as chairman of the company hours before the it was reported that two women had accused him of sexual harassment. With its future in doubt, Tronc—which also owns papers including The Baltimore Sun, Orlando Sentinel, and Hartford Courant—will report its second-quarter earnings this afternoon.

While the Times has shown that digital subscription can generate sustainable revenue, the question facing other outlets, including those owned by Tronc, is whether they can make a similar pivot on a smaller scale. Not everyone can offer the breadth and depth of the reporting of the Times or The Washington Post; whether consumers prove willing to pay up for access to their local papers will go a long way to determining what the landscape of news looks like over the next decade.

Below, more on business news from the media industry.

  • A note of caution for the Times: The 109,000 additional digital subscriptions represented a decline in growth from previous quarters. The Times added 139,000 digital subscribers in Q1, and 157,000 in the fourth quarter of 2017.
  • Hanging on to the “Trump bump”: CNN’s Tom Kludt notes that Times CEO Mark Thompson said Wednesday that the paper had been successful in retaining subscribers who signed up in the months following Trump’s election.
  • Tronc stock soars: Bloomberg’s Nick Turner writes that Tronc stock was up as much as 17 percent yesterday following news of its possible sale, its biggest rally in six months. Private equity ownership of other papers, especially those owned by Alden Global Capital, has led to severe cutbacks.

 

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Correction: The author of The Atlantic‘s “Jim Acosta’s dangerous brand of performance journalism” is Todd S. Purdum, not Purham.

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Pete Vernon is a CJR staff writer. Follow him on Twitter @ByPeteVernon.