The New York Times, which is scrambling to raise cash after downplaying its debt woes, reported a steep plunge in profit and said it hired an investment bank to sell its stake in the Boston Red Sox.
Fourth-quarter earnings fell 48 percent as print advertising continued to deteriorate. In another troubling sign, ad revenue from its Internet businesses, including the flagship site and About.com, declined for the first time after years of growth.
The Times, whose papers include the Boston Globe and the International Herald Tribune, is confronting the worst ad market in decades and deadlines to pay back millions of dollars in the next couple of years.
Yesterday, the company disclosed another potential cash pitfall: Its pension plan is facing a shortfall of $625 million, compared with just $48 million a year earlier, because of the tanking stock market.
If the markets don’t recover in the near future, the Times may have to kick in millions more in cash to prop up the plan as early as 2010, analysts said.
The Times said it hired Goldman Sachs to sell its 18 percent stake in New England Sports Ventures, which includes the baseball team, Fenway Park, and a portion of a regional cable sports network.
Analysts value the Red Sox stake at between $140 million and $160 million, although they caution it will be challenging for any prospective buyer to secure the financing.
The Times posted a profit of $27.6 million, or 19 cents a share, in the fourth quarter, down from $53 million, or 37 cents per share, in the same quarter a year earlier. Revenue fell 11 percent, to $772.1 million from $865.8 million.
Ad revenue at the company’s News Media Group, which includes the flagship paper, fell 18 percent. The company was particularly hard hit when department stores and other retailers pulled back during the holiday shopping season.
Even Internet ad revenue – typically a bright spot – fell 3.5 percent in the fourth quarter.
Still, the results were better than many analysts had feared. Shares in the company rose 38 cents, or 6.8 percent, to close at $5.98.
The dismal earnings report comes a week after the company received a $250 million cash injection from Mexican billionaire Carlos Slim at a steep 14 percent interest rate.
The company, which has more than $1 billion in debt, has already slashed its dividend by nearly 75 percent and is in talks to mortgage its sleek Midtown headquarters.