The New York times is a media and publishing company.
New York TimesOctober 11, 2020
Thesis - The New York Times is perhaps one of the best known brands in the world. For years, it was a leading newspaper in the US. As the internet grew, the New York Times suffered. News moved online and advertising (its primary revenue source) shifted to elsewhere. From 2002 to 2009, the New York Times lost almost 90% of its value. Ouch. Since then, the business has re-invented itself. Over the last few years, NYT has invested in top quality reporting whilst other news outlets focus on high-frequency lower-quality reporting - they pay reporters twice as much on average. They have invested in their tech and focused their business model on paid digital subscriptions, providing them consistent recurring revenues. The NYT of today is more similar to Netflix than a traditional newspaper, investing in content and monetising subscribers.
Financials & Performance - NYT is a business in transition. As the print subscribers decline, their digital subscribers are increasing, giving the impression of a sideways moving company. Looking at the digital business, they have 5.7m paid subscribers, growing 20-30% annually.
Opportunity - NYT is about to emerge from a point of break even, in terms of its cross over from print revenue to digital revenue. As its new business is digital, it benefits from having an almost 0 marginal cost for servicing the next customer. If you believe NYT can continue to grow its subscriber base, they may be about to enter a new era of revenue growth and profitability.
Risks - The company must maintain it’s execution over the coming years, continuing to grow its subscription base and digital revenues. They must do so with a new CEO, as Mark Thompson, the CEO who led the turnaround from 2012 to 2020 stepped down in July. In Meredith Kopit Levien they have a good replacement who has already been an executive with the company for 7 years.
Credit Mine Safety Disclosure’s excellent presentation on the NYT story.