Case: New York Times

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Presentatie New York Times tijdens MediaWeek 2006 (Dec. 2006)

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Case: New York Times

  1. 1. The New York Times Company December 6, 2006
  2. 2. Janet Robinson President & Chief Executive Officer The New York Times Company
  3. 3. Janet Robinson President & Chief Executive Officer The New York Times Company Leonard Forman Executive Vice President & Chief Financial Officer The New York Times Company Scott Heekin-Canedy President & General Manager The New York Times Martin Nisenholtz Senior Vice President, Digital Operations The New York Times Company
  4. 4. Significant Changes at The Company
  5. 5. Advertiser & Consumer Expectations Media consumers are embracing the proliferation of choices Advertisers demanding increasingly narrow target audiences
  6. 6. News Media Group: Ad Revenues by Category November 2006 YTD 3% 29% 23% 45% Total 6% 44% 47% 3% Regional 5% 39% 30% 26% New England 2% 20% 14% 64% New York Times Other Ad Rev Total Classified Retail & Preprint Nat’l Media Group
  7. 7. Entertainment Advertising: Strategies Have Changed Studios allocating more ad budgets to the Internet Studios reducing their spending if movies don’t perform well within a couple of weeks Entertainment Ad Revenue: -19% (or $26 million) Nov YTD
  8. 8. New York Times Media Group Advertising Revenue 0% 14% Retail +7% 4% Live Entertainment +4% 5% Telecom % Change Nov YTD Ad Rev
  9. 9. New York Times Media Group Advertising Revenue -1% 20% Classified: -18% 2% Auto -12% 6% Help Wanted +15% 10% Real Estate % Change Nov YTD Ad Rev
  10. 10. New England Media Group Advertising Revenues -11% 39% Classified -8% 30% Retail -16% 6% Entertainment % Change Nov YTD Ad Rev
  11. 11. Regional Media Group Advertising Revenues Ad revenues up 3% Nov YTD Dominant local media
  12. 12. News Media Group Q4 Outlook Slower Ad Revenue Growth Difficult Comparisons Real Estate: slowing growth Entertainment, Help Wanted & Auto: still soft
  13. 13. Focusing Our Strategy Introducing new products & services Pursuing leadership positions in key content verticals Building long-term innovation capability Rebalancing our portfolio Increasing operational efficiency & reducing fixed & variable costs
  14. 14. Powerful & Trusted Brands
  15. 15. Exciting New Magazines
  16. 16. New Print Product Introductions Estimate $30 million revenue in ‘06 Zoned & special sections New ad placements Weekly newspapers
  17. 17. NYTC Aggregates 10 th Largest Online Audience Source: Nielsen//NetRatings Oct. 2006 42,548 New York Times Co. 10 45,382 Disney Internet Grp. 9 49,903 Amazon 8 59,861 InterActiveCorp 7 64,820 News Corp. Online 6 66,649 eBay 5 97,611 Time Warner 4 103,794 Google 3 106,213 Yahoo! 2 106,596 Microsoft 1 Unique Visitors in thousands Company Rank
  18. 18. NYTimes.com Redesign: Engaging Our Readers
  19. 19. Acquisition of Baseline/StudioSystems B2B supplier of of proprietary entertainment information Growing syndication/licensing business
  20. 20. Targeting Local Advertising Launching new local search product Expected to increase traffic to site Local search applications planned for NYTimes.com and Regional sites
  21. 21. Growing Our Online Businesses Digital Operations 4% 6% 8%+ 2004 2005 2006 E % of Company Revenues 2006 Estimated Total Digital Revenues: $270 million
  22. 22. Growing Our Online Businesses * Median of 11 market forecasts For 2006 industry online ad revenues expected to grow 26%* Expect to outperform the industry in 2006 & 2007 In 2007 expect total digital revenues to grow about 30%
  23. 23. Developing Key Content Verticals Augmented digital portfolio with About.com About.com among top sites in key content verticals: Health Food Education
  24. 24. Expanding About.com Exploring opportunities with international audience Added 60 Guides in ’06; Guides now total 570 Engaging audience through more user-generated content
  25. 25. Building on About.com: Calorie-Count.com Offers weight loss & nutritional information Incorporated into About.com Attracts health & nutrition advertising
  26. 26. Strong Revenue Growth at About.com Ad revenues estimated +51% November YTD Operating margin: 38% September YTD & 27% for ownership period in ‘05
  27. 27. <ul><li>Investments: </li></ul>Online Investments & Acquisitions B-to-B supplier of entertainment information News aggregation site Acquisition: Mortgage lead generation company
  28. 28. Integrated Print and Digital Ad Teams & Newsrooms Sell audiences, not just platforms Newsrooms more attuned to news consumption habits
  29. 29. Building a Vibrant R&D Capability New products & platforms New tools & services Strategic partnerships & investments
  30. 30. R&D: Closely Linked to Our Operating Units Launched mobile Web sites & launching local search in Boston Looking at high-speed Internet access & location-aware Web-enabled devices
  31. 31. Rebalancing Our Portfolio Continuously evaluating our businesses: Remaining relevant to our strategy: Financial performance Growth Return on investment Sold investment in Discovery Times Channel Proposed sale of Broadcast Media Group Anticipated sale of WQEW-AM
  32. 32. Focused on Reducing Costs Reduced costs & realized gains from productivity by $120 million over the past 2 years
  33. 33. Times Dual-Class Structure Ochs-Sulzberger family owns about 20% of equity Structure was in place before Company went public in 1969 Protects journalistic independence and integrity of The Times
  34. 34. Leonard Forman Executive Vice President & Chief Financial Officer The New York Times Company
  35. 35. Improving Operational Efficiency <ul><ul><li>Avoid $50 million in capex at Edison </li></ul></ul><ul><ul><li>Expect charges of $104 to $128 million & capex of $135 million </li></ul></ul><ul><ul><li>ROI of at least 15% </li></ul></ul><ul><ul><li>Expect to complete in Q2 2008 </li></ul></ul><ul><ul><li>Anticipate annual savings of $30 million </li></ul></ul>Looking at further consolidation opportunities in New England Consolidating New York printing facilities:
  36. 36. Process Engineering Initiatives <ul><ul><ul><li>Eliminating, consolidating & outsourcing certain tasks </li></ul></ul></ul><ul><ul><li>Increasing investment in technology </li></ul></ul>Process Engineering Process: Outsourced employee benefit & customer care processes Evaluating outsourcing of other activities
  37. 37. Streamlining Our Business <ul><li>Total Company* Change in FTEs, 2006 v. 2004 </li></ul>*Excludes acquisitions & the Broadcast Media Group -6% Total -14% G&A -2% Tech/Prod/Dist 0% Content -17% Sales
  38. 38. Newsprint Market Latest newsprint increase has not been implemented in the market Becoming difficult for suppliers to maintain supply/demand balance Newsprint prices may trend lower in ’07 resulting in our cost/ton remaining flat with ‘06
  39. 39. Reducing Newsprint Consumption Converted to lighter-weight paper and have eliminated certain sections Reducing the web width at The Times Expect annual savings of $12 million in ’06 Expect to complete in Q3 ‘07 Expect savings of $4 million in ‘07 Expect annualized savings of $12 million
  40. 40. Significant Cost Savings 2005 & 2006 *Includes further centralization of back office operations & consolidation of data centers. In millions $120 Total $16 Other* $14 Newsprint $40 Productivity $50 Staff Reductions Targeting $65 to $75 million in ‘07
  41. 41. Leveraging Our Investment in Our New Headquarters Expecting to generate $10-$12 million in annual revenues Looking for ways to monetize our investment Planning to lease out at least 5 floors
  42. 42. Creating Value for Our Shareholders Invest in high-return capital projects Make financially & strategically attractive acquisitions and investments Provide a competitive dividend Repurchase our stock Reduce our debt
  43. 43. Assumptions for 2007 Wages: + 2% to 3% Newsprint costs per ton: flat D&A: $195 to $205 million Income from joint ventures: $10 to $15 million Interest expense: $48 to $52 million
  44. 44. Capital Expenditures: 2007 Outlook $15 Web Width Reduction (Q1-Q3) $65-$80 Other Projects $75 Plant Consolidation (Q1-Q4) $30 SAP Project (Q1-Q4) In millions $340-$370 Total $155-170 New Headquarters (Q1-Q3)
  45. 45. Focusing Our Strategy Introducing new products and services Pursuing leadership positions in key content verticals Building long-term innovation capability Rebalancing our portfolio Increasing operational efficiency & reducing costs
  46. 46. Q&A
  47. 47. Forward-Looking Statements <ul><li>Except for the historical information contained herein, the matters discussed in this presentation are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include national and local conditions, as well as competition, that could influence the levels (rate and volume) of retail, national and classified advertising and circulation generated by our various markets and material increases in newsprint prices. They also include other risks detailed from time to time in the Company’s publicly filed documents, including the Company’s Annual Report on Form 10-K for the year ended December 25, 2005 and Quarterly Report on Form 10-Q for the quarter-ended September 24, 2006. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. </li></ul>

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