By: E&P Staff Moody's Investors Service said Friday it may cut its rating of the New York Times Co.'s debt because of the company's weak cash flow, high financial leverage, and declining margins.
If that wasn't enough, Moody's said it is concerned about growing media competition, including the Internet, and what it calls ''event risk'' in the newspaper sector.
This comes at the end of a week that saw mixed Wall Street and analyst reaction to the blockbuster Knight Ridder sale to McClatchy Co.
The New York Times Co.'s share buybacks over the last four years, debt-financed acquisition of About.com, and capital expenditures for its move into new headquarters ''leaves the company with a significant debt burden, heightened adjusted leverage, resulting in diminished financial flexibility,'' Moody's said.
Shares of the New York Times, which also publishes the Boston Globe and International Herald Tribune, fell 41 cents, or 1.5%, to $26.22 in late-morning trading on the New York Stock Exchange.
Moody's said its review will primarily focus on the Times Co.'s ability and commitment to reduce its debt over the next 18 to 24 months, and its ability to improve its operating trends and margins.
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