Reading between the lines at the NY Times…
On Wednesday, the New York Times announced that it didn’t get enough volunteers who were willing to leave the paper voluntarily and that as a result, there would be “relatively small numbers of layoffs”, prompting the Writer’s Newspaper Guild to file a grievance. Later that day, the New York Times Co. (NYT) filed this 10Q which provided some interesting new details on how much all of this downsizing is costing the company. (Full disclosure: I periodically write for the Times as a freelance journalist.)
In Footnote #8, which is a more detailed discussion of information the company included in its first quarter earnings release, the company noted that it took an $11.2 million charge during the first quarter to cover buyouts, compared with $7.8 million for the same quarter in 2007 and that most of these charges were recognized by the company’s “News Media Group”, which includes The Times, the Boston Globe, WQXR, and a group of 15 regional newspapers.
The same footnote noted that at the end of the quarter, the company had a buyout liability of $21 million, more than twice the $10 million listed at the end of the third quarter. I couldn’t find similar language in the first quarter Q filed in May 2007, so it’s hard to make a direct comparison. Another new thing in Wednesday’s filing is the $30 to $35 million in additional buyout costs listed under “expectations” for 2008, a number not included in the earnings release.
Also interesting in Wednesday’s filing was the company’s effective tax rate, which was listed as a whopping 105%. In the first quarter of 2007, the effective tax rate was 51%. As Bob Olstein once told me, weird tax rates can often be a reliable indicator of unusual accounting, though there’s not enough information in the Q to make that call here.