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Facing challenges, Mark Thompson takes the CEO reins at the NYT

Source: Thomson Reuters Foundation - Mon, 12 Nov 2012 05:32 PM
Author: Reuters
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* Sulzberger backs Thompson in internal memo

* Thompson confronts biz issues at Times Co, BBC fallout

* Thompson tells ITV: BBC saga won't affect NYT job

By Jennifer Saba

Nov 12 (Reuters) - A host of challenges confront Mark Thompson as he officially takes over as chief executive of New York Times Co, from making the company less dependent on advertising to trimming costs to figuring out what to do with its pile of cash.

Sizable as the tasks are, Thompson, who reported for work as the Times Co's CEO for the first time on Monday, is also dealing with questions resulting from a series of scandals that have rocked his former employer, the BBC.

George Entwistle, Thompson's successor as the BBC's director-general, resigned on Saturday and two of the broadcaster's top news directors stepped aside on Monday. [ID: nL5E8MC4BN]

Thompson served as director-general of the BBC from 2004 until September this year.

Britain's broadcasting company has come under fire for its handling of two investigations at its flagship news show, "Newsnight." One, a massive sexual abuse scandal involving the late Jimmy Savile, a former presenter at the network, that never aired. The other was a news story of an allegation that a former top politician sexually abused children, which was later proven to be false.

The latter report occurred after Thompson left the BBC. However, the unaired program about Savile that was shelved, occurred while Thompson was director-general of the broadcasting company.

In a staff memo obtained by Reuters, New York Times Chairman Arthur Sulzberger welcomed Thompson but sidestepped addressing the scandals at the BBC.

"We welcome him at a time of tremendous change and challenge, which must be met with equal focus and innovation," Sulzberger said in the memo distributed on Monday.

"Mark will lead us as we continue our digital transformation, bolster our international growth, drive our productivity and introduce new technologies that will help us become better storytellers and enrich the experience for our readers and viewers."

British and U.S news media filmed Thompson as he arrived at the New York Times headquarters on Monday near Manhattan's Times Square. "I'm looking forward to starting work there right now," said Thompson, who was dressed in a navy blue suit, red tie and had a backpack slung over his right shoulder.

When asked if the BBC saga would be a distraction he said: "I believe it will not in any way affect my job, which I'm starting right now as chief executive of the New York Times Company."

Thompson begins as Times Co CEO just weeks after the company reported bruising third-quarter results that missed revenue and profit expectations and sent shares tumbling 22 percent. [ID: nL1E8LPE20][Breaking views: ID: nL3E8MC3NX]

His arrival Monday marks the first time the company has had a CEO since the abrupt ouster of Janet Robinson last December.

Thompson declined to comment about his plans for the company.

TAKING CARE OF BUSINESS

In addition to the business challenges, Thompson must also manage the desires of the Ochs-Sulzberger family, which has controlled The New York Times for more than 100 years. The company's business issues have forced the family to forego a dividend since 2009.

"The first thing he will have to focus on is the balance sheet," Barclay's analyst Kannan Venkateshwar said of Thompson's priorities.

Analysts widely expect the company to reinstate a dividend since it will have roughly ${esc.dollar}1 billion in cash by the end of the year, due in part to sales of some of its newspapers and its digital group About.com. Debt is about ${esc.dollar}700 million and therefore is very manageable in the context of cash, Venkateshwar said.

Beyond the balance sheet, Thompson will have to tackle the declining advertising revenue in both print and digital while convincing readers to pay more for its products.

While the company's circulation revenue - which includes both print and digital subscribers - now makes up 52 percent of total revenue, that percentage must increase to offset persistent advertising losses.

"I think there are a lot of hurdles to the NYTimes.com pay model," Morningstar analyst Jocelyn Mackay said. "I do wonder if their price point is too expensive."

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