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Michael Hirschorn got news industry observers sputtering last week by opining that, based on his analysis of the New York Times Company's balance sheet, the Great Gray Lady might run out of cash to pay its bills in just a few months. Hirschon told readers at Atlantic.com:
Earnings reports released by the New York Times Company in October indicate that drastic measures will have to be taken over the next five months or the paper will default on some $400million in debt. With more than $1billion in debt already on the books, only $46million in cash reserves as of October, and no clear way to tap into the capital markets (the company's debt was recently reduced to junk status), the paper's future doesn't look good.
To be fair, Hirschon said he didn't expect the Times to fold -- at leastm not right away. He predicted that they might sell some assets or borrow against the value of their real estate to keep afloat. But he argued that it was likely that the print edition would fold soon, forcing the company to drastically reduce its reporting staff. The remnant online staff might actually turn out a better news publication, he said, since the Times would be forced to stick to hard news and stop its decades-old practice of chasing suburban print circulation by publishing endless lifestyle features.
The response was swift and critical. In a letter to the Atlantic editor from Times spokeswoman Catherine Mathis faulted Hirschon for not seeking a comment from the Times:
We fully recognize that our industry is undergoing unprecedented change as technology alters the habits of our readers and advertisers. At the same time, the cyclical downturn in the U.S. economy has exacerbated advertising declines. But The New York Times Company is in a better position than many others in the newspaper industry because of the steps we have taken to improve our performance. In the last five years, we have focused on developing our digital properties and carefully reducing costs while continuing to provide our readers with great journalism both in print and online.
Rick Edmonds, the news business blogger for Poynter,org, said the problem was Hirschorn's math, as well as his lack of understanding of how newspaper financing works:
Relax, Times-o-philes. The scenario is not the least bit plausible.
The Columbia Journalism Review's Megan Garber faulted both Hirschon and the headline writers at the Atlantic for sensationalizing a story that doesn't say anything about the state of the news media that isn't already known.
[M]uch of that argument is little more than a smart synthesis of conventional wisdom: the only thing really big or groundbreaking about Hirschorn’s article is its breezily superficial Dead By May! premise.
Indeed the quest for a business model to replace the eyeballs-to-advertisers formula that drove the rise of print journalism is an ongoing and urgent one. The latest issue of Nieman Reports, a quarterly publication from the Nieman Foundation for Journalism at Harvard, parses the meaning of the digital revolution from every angle, civic, financial -- even neurobiological. Editor Melissa Ludtke acknowledged the sea change in which the industry finds itself:
How all of this affects the way journalists do their work or what elements of journalism will survive this digital transformation remains a work in progress—with fewer answers than questions, with less confidence and more concerns. Business-models-in-waiting top the list of worries, even as experimentation is underway to find new ones.
Related:Media Re:public: News and Information as Digital Media Comes of Age Berkman Center for Internet and Society, Harvard University.
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