(Ed.’s note: A very smart piece about the quandary of the traditional print news business. Well worth clicking the link for the whole article.)
Virtually all the predictions about the death of old media have assumed a comfortingly long time frame for the end of printâ€šÃ„Ã®the moment when, amid a panoply of flashing lights, press conferences, and elegiac reminiscences, the newspaper presses stop rolling and news goes entirely digital. Most of these scenarios assume a gradual crossing-over, almost like the migration of dunes, as behaviors change, paradigms shift, and the digital future heaves fully into view. The thinking goes that the existing brandsâ€šÃ„Ã®The New York Times, The Washington Post, The Wall Street Journalâ€šÃ„Ã®will be the ones making that transition, challenged but still dominant as sources of original reporting.
But what if the old media dies much more quickly? What if a hurricane comes along and obliterates the dunes entirely? Specifically, what if TheNew York Times goes out of businessâ€šÃ„Ã®like, this May?
Itâ€šÃ„Ã´s certainly plausible. Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the companyâ€šÃ„Ã´s debt was recently reduced to junk status), the paperâ€šÃ„Ã´s future doesnâ€šÃ„Ã´t look good.
â€šÃ„ÃºAs part of our analysis of our uses of cash, we are evaluating future financing arrangements,â€šÃ„Ã¹ the Times Company announced blandly in October, referring to the crunch it will face in May. â€šÃ„ÃºBased on the conversations we have had with lenders, we expect that we will be able to manage our debt and credit obligations as they mature.â€šÃ„Ã¹ This prompted Henry Blodget, whose Web site, Silicon Alley Insider, has offered the smartest ongoing analysis of the companyâ€šÃ„Ã´s travails, to write: â€šÃ„Ãºâ€šÃ„Ã²We expect that we will be able to manageâ€šÃ„Ã´? Translation: Thereâ€šÃ„Ã´s a possibility that we wonâ€šÃ„Ã´t be able to manage.â€šÃ„Ã¹
The paperâ€šÃ„Ã´s credit crisis comes against a backdrop of ongoing and accelerating drops in circulation, massive cutbacks in advertising revenue, and the worst economic climate in almost 80 years. As of December, its stock had fallen so far that the entire company could theoretically be had for about $1 billion. The former Times executive editor Abe Rosenthal often said he couldnâ€šÃ„Ã´t imagine a world without The Times. Perhaps we should start.
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Michael Hirschorn – Atlantic