Report: Chances are Slim NYT Co. Will Go Private, Sell

By: Jennifer Saba The rumors circulating about The New York Times Co. going private are unfounded, according to a new report from Merrill Lynch.

Analyst Lauren Rich Fine conducted a meeting with the company's management and concluded: "We do not think speculation is warranted that the company would consider an LBO or sale," she wrote.

Several subjects popped up in the meeting, but the focus was on the company's cost-cutting initiatives and the poor performance at the New England Media Group.

Fine notes that in the New York Times' most recent 10Q filing, the company could possibly write-down the assets of the New England Media Group "if operating results continue to trend lower than expected."

Meanwhile the division continues to experience dramatic drops in advertising and circulation revenue -- "declines of the magnitude not typically seen," Fine wrote. Ad revenue fell 7.2% in Q1, 10.4% in Q2, and 12.4% in Q3.

While new management has been brought in to run New England, the issue is market-related. The problem with New England is more a "function of the high proportion of tech savvy (read online) youth that live in Boston as well as the drag created by corporate consolidations in the area," the report said comparing Boston's situation to San Jose's woes during the boom and bust cycle of Silicon Valley.

Fine noticed the company was "happiest" when talking about reductions. An investment in SAP software that the company plans to roll out is expected to bring savings, though executives did not indicate how much.

Nor would executives respond when "asked repeatedly" about the new headquarters and how the company plans to use proceeds from a sale or leaseback. Fine estimated a potential $10 million to $12 million in revenues that could be generated from leasing out five floors.

Shares of the New York Times were trading up 12 cents to $24.21 late this afternoon.