Moody's has just announced a downgrade in the rating of New York Times Company debt, with Times' senior unsecured long—term debt rating cut by two notches from "A2" to "Baa1," the third—lowest investment grade ranking. It also cut the commercial paper ratings to "Prime—2" from "Prime 1."

This amounts to a major rebuke of the management of Pinch Sulzberger. Borrowing more money (which will be necessary to complete the Taj Majhal headquartes building under construction) will cost more thanks to the downgrade. Although Moody's indicates further downgrades are not in prospect for the next year or more, getting lowered two grades is a strang signal that things are not going well.

We have been warning shareholders that their business is being badly managed for almost two years now. In that time, shareholders have already lost a substantial portion of their investment, even as the stock market went up substantially.

Only family members can fire Pinch, thanks to a two tier shareholding system. Perhaps Moody's downgrade will get their attention. It is not too late to end the failed administration of Pinch and put in  charge a grown—up who will manage the business professionally and focus on putting out a balanced and unbiased news product.

Thomas Lifson  5 25 06