It was meant to be a new beginning for a venerable newspaper. The New York Times building, soaring 57 stories above Manhattan’s 42nd Street, was heralded as the most significant addition to the city’s skyline for a decade.
When it opened in 2007 it was an ambitious statement of intent for the most famous journalistic brand in America. It would be a sleek and stylish new home for the best journalism in the world.
That was then. Now the “Gray Lady,” whose masthead bears the famed motto “All the news that’s fit to print,” could be staring into a financial abyss.
The US newspaper industry is in a disastrous state. Last year was a watershed: jobs were shed in their thousands, newsrooms slashed costs and even some of the most illustrious names in the business — such as the company that owns the Los Angeles Times and Chicago Tribune — went bankrupt. On Friday it was announced that the Seattle Post-Intelligencer will be closed or go digital-only if no buyer for the 145-year-old title is found within 60 days.
Now, as the industry gears up for an even worse year, could its most renowned title be the next to fall?
Saddled with debts, crippled by the costs of the new building and of running one of the most expensive news operation on earth, some believe the Times is running on empty. It is facing all the same problems that other American newspapers are struggling with, as the Internet steals subscribers and advertising dries up in the face of a deep recession. In a sign of the desperate financial straits in which the industry finds itself, the Times broke one of its oldest rules last Monday and put an advert on its hitherto sacrosanct front page. But the move only added to speculation about the future of the Times.
Some New York media commentators are beginning to contemplate the previously unthinkable: could the New York Times go under? Certainly Michael Wolff, a media writer at Vanity Fair, thinks so. “There is no point of optimism here. There is no way that this situation gets better for them,” he said.
It is hard to overstate the place that the New York Times holds in American journalism. It is worshipped by media professionals as the home of true, old-fashioned reporting. Many look enviously at its lavishly funded foreign operations, its arts coverage and its investigations unit. Liberal America regards the paper as a bible, while conservatives love to hate it. But no one ignores the New York Times, least of all the people in power. Like the BBC’s Today program in Britain, it is vital in shaping the news agenda of America each morning. “Losing the Times would be a blow to more than just American journalism; it would be a blow to American democracy,” said Jack Lule, a journalism professor at Lehigh University, Pennsylvania.
The latest bombshell to hit media circles in America was an article in the Atlantic magazine by Michael Hirschorn that raised the prospect that the Times might default on debts of US$400 million by May. Hirschorn pointed out the Times earnings reports showed only US$46 million in cash reserves and no way to borrow, because its debt had been recently downgraded to junk status. “What if the New York Times goes out of business — like, this May?” Hirschorn asked.
It sent shock waves through much of Manhattan’s chattering classes, though Times executives say they will be fine. Times senior vice-president, Catherine Mathis, pointed out the debt was a revolving credit agreement. “We have been talking with lenders and, based on our conversations with them, we expect to get the financing to meet our obligations when they come due,” she said.