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NYT Co. Ad Revenue Tanks 27% in Q1

The New York Times Co. saw publisher’s ad revenue plummet 27% in the first quarter of 2009. The company lost $74.5 million, or 52 cents per share, compared to the same quarter last year, when the company lost $335,000.

Revenue for the period slipped 19% to $609 million, or about $22 million below the average analyst estimate, writes the AP.

Ad revenue for the company fell by nearly $124 million. Even internet ad revenue slumped, down 8%, or $3.6 million.

Circulation revenue was up slightly on increased newspaper prices.

The company did manage to lower first-quarter expenses, cutting them by 9.5% from the same quarter last year - and cuts are expected to continue, for a total savings of about $330 million annually by the end of the year.

Most Times Co. employees are having their paychecks cut by 5%, and the cuts are worse at The Boston Globe, where management is asking for greater concessions and threatening to shut down the paper altogether if unions don’t agree to millions of dollars of concessions.

In order to be able to pay down some of its debt, The New York Times Co. sold most of its midtown Manhattan headquarters and is leasing it back. It also snared $250 million from Mexican billionaire Carlos Slim Helu.

Newspapers were already struggling with falling ad revenue as advertisers shifted much of their budgets from traditional media to the web. But the recession has hit newspapers harder than all other media except, perhaps, radio. Zenith Optimedia is predicting that newspaper ad spending will fall 12% in 2009.

Sam Zell, the businessman who purchased the Tribune Co. in 2007, has admitted the buy was a mistake. He said he did not foresee the decline in the newspaper industry. “I was too optimistic in terms of the newspaper’s ability to preserve its position,” he told Bloomberg Television.

Zell said that the sooner the newspaper industry acknowledges that the current model of newspapers does not work, the better.