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PrintJanuary 29, 2009
WaPo shows the NYT how it is done (updated)
Not every newspaper company is faltering as badly as the New York Times under Pinch Sulzberger. The Washington Post has just been awarded an A rating on a proposed new issue of debt by Standard and Poor's, and an A1 rating by Moody's, the agency which just put the Times' debt deep into junk status.
When Pinch took over the Times for his family, it was diversified, as was the WaPo. But he foolishly squandered billions and sold off the crown jewels to maintain the regal style the staff expected and pumped cash into dividends. In contrast, the WaPo managed its assets far more prudently, and is not in trouble.
The overall state of the newspaper industry is no excuse for Sulzberger's management failures. The Washington Post Company demonstrates this fact conclusively.
How much longer will the Sulzberger family entrust its dwindling fortune to the hands of a hapless incompetent?
Ed Lasky adds:
A little recognized fact is that the Wa Po derives large chunk of its profits (and hence, good bond ratings) to their educational division (Stanley Kaplan, SCORE tutoring centers). The company’s revenues in that division have been soaring for years. Ironically, the growth of the Kaplan division is due in part to the increase in standardized testing-a practice the Times opposes. The growth of SCORE tutoring centers comes in the face of the downfall in our public educational systems-due, not to a lack of funding (which has been generous) but to the monopoly of education in our nation and the grip that the teachers’ unions have on our educational policy.
The steady hand of Warren Buffett, whose Berkshire Hathaway owns a chunk of Washington Post stock and who sits on the board, may also have helped guide the company. What has the board of the New York Times been doing during the reign of Pinch?
The steady hand of Warren Buffett, whose Berkshire Hathaway owns a chunk of Washington Post stock and who sits on the board, may also have helped guide the company. What has the board of the New York Times been doing during the reign of Pinch?
Ironically, the Times supports the policies and the people that are responsible for the decline in public education, namely the monopoly of education in America, the small number of charter schools ,poor pedagogical methods, and teachers' unions. Thus, it has helped create the needs which WaPo's Kaplan prospers in satisfying.
Hat tip: David Paulin
Update:
Henry Blodgett notes:
Update:
Henry Blodgett notes:
Importantly, NYTCo also noted [in its earning report - ed.] that its pension plan is now underfunded to the tune of $625 million. Unless the stock market recovers or the government changes its pension regulations, this obligation represents yet another claim on the company's assets and future cash flows ahead of that of common shareholders.Including the pension obligation, the company has cash obligations of about $2 billion coming due over the next 7 years (including the $250 million loan from Carlos Slim). The sale of the Red Sox stake ($200 million?) and corporate headquarters ($200 million?) will help reduce this. But that will still leave more than $1.5 billion of cash obligations for a company that will likely begin consuming cash this quarter and beyond
