“Gray Lady” Battles Red Ink
With its stock price plunging more than 60 percent in the past year, its print advertising sales collapsing, and a reported $1 billion in debt, The New York Times Co. is urgently trying to raise $225 million by offering a sale-leaseback deal on its new 52-story headquarters building in midtown Manhattan.
The move to sell a portion of its gleaming new skyscraper, designed by architect Renzo Piano, is the latest in a series of cost-cutting steps by the newspaper giant, according to Crain’s New York Business.
Previously, The New York Times Co. has slashed its dividend for investors by 75 percent, cut companywide staff by 8 percent, and raised its newsstand price while merging sections of the newspaper, Crain’s reports.
However, the publishing conglomerate still is grappling with a 92-percent plunge in net income in the first nine months of 2008, and is in the midst of negotiations with lenders regarding more than $600 million in loans that are coming due this year and next. The Times parent company also is trying to sell its stake in the Boston Red Sox baseball franchise.
Industry analysts expect the Times to survive any consolidation of the newspaper business during the current global recession, but some real estate specialists believe the company may have waited too long to try to sell off a piece of its headquarters building.
While the current credit squeeze generally makes leaseback deals an attractive option, the overall unavailability of financing limits the number of potential players, analysts told Bloomberg News.