Moody's Investors Service has announced that it is contemplating lowering the rating for the debt of the New York Times Company, striking a possible major blow to the stewardship of Pinch Sulzberger. According to Editor & Publisher, a left—leaning publication, Moody's cited

the company's weak cash flow, high financial leverage, and declining margins

and highlighted

growing media competition, including the Internet, and what it calls ''event risk'' in the newspaper sector.

Pinch's grandiose plans and financial maneuvering may be his undoing, in the face of this unpromising business environment. E&P says:

The New York Times Co.'s share buybacks over the last four years, debt—financed acquisition of About.com and capital expenditures for its move into new headquarters ''leaves the company with a significant debt burden, heightened adjusted leverage, resulting in diminished financial flexibility,'' Moody's said.

Jack Risko and I showed recently how the "declining margins" of the Times are related to a poorly—considered strategy of using a national edition to compensate for deterioration of the core franchise of the metropolitan New York editions of the Times. It looks like Wall Street is catching on.

Hat tip: Lucianne.com

Thomas Lifson  3 17 06