New York Times Case Essay

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The New York Time Company Arthur O. Sulzberger Jr., chairman and publisher for The New York Times Company, left work on November 5, 2008, reeling from amazement over the events of the day. Although since the 1980s print circulation had rapidly declined in the newspaper industry, this day had been very different. Thanks to the post-election front page headline declaring, “OBAMA-Racial Barrier Falls in Decisive Victory,” The New York Times had flown off shelves at a rate not seen since November 11, 1918, when the newspaper, then owned by Sulzberger Jr.’s grandfather, announced the end of World War 1. Even more significant is the fact that copies of the Obama-headlined newspaper were selling on eBay for more than $600. However, Sulzberger Jr. did not dwell on the good fortune of this particular day. The excitement in the newsroom over the paper’s interest did not erase or even ease the current crisis at The New York Times Company. In September 2008 total company revenues from continuing operations decreased 8 percent compared with the same month in 2007, and advertising revenues decreased 13 percent. Unlike the challenges that his forebears had faced, today’s challenges could not be solved simply by investing money in the company with the hope that high-quality journalism would prove more profitable. The company was fast approaching the point where it would have to manage its business primarily to conserve cash (with only $46 million in cash on the books) and avoid defaulting on its debt (approximately $1.1 billion). Furthermore, Sulzberger Jr. realized that the situation would only worsen as advertising revenue was widely projected to keep falling. According to The New York Times Company’s policy on ethics in journalism, the core purpose of the company is to “enhance society by creating, collecting and distributing high-quality news, information and entertainment.”

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