UPDATE 1-New York Times cuts dividend, 'reevaluates' assets

Thu Nov 20, 2008 5:19pm EST

(Adds statements from Sulzberger and family)

By Robert MacMillan

NEW YORK Nov 20 (Reuters) - The New York Times Co (NYT.N) slashed its dividend by almost three-quarters and said it would cut spending and reevaluate its assets to cope with a slump in advertising revenue that is gouging U.S. newspaper publishers.

The Times cut its dividend to 6 cents a share from 23 cents a share, or 74 percent, and said in a statement that it would reduce capital spending and lower its operating costs.

The trustees of the Ochs-Sulzberger family's shares in the Times said they support the move, but called it difficult.

The family's statement amounts to a vote of confidence in the Times as buzz builds among industry watchers over whether the family would sell the company and The New York Times newspaper, ending more than a century of family ownership.

The Ochs-Sulzberger family controls a special class of shares that give it more control over the company than non-family shareholders. The Times board also cut the dividend on the family's shares.

The company did not say whether it would cut jobs or whether it could sell newspapers or other properties.

The company is under increasing pressure from declining advertising revenue and circulation as more people get their news online. It also is under pressure from Rupert Murdoch, whose News Corp NWSa.N international media conglomerate bought The Wall Street Journal with a mission of knocking the Times off its perch as the U.S. newspaper of record.

Murdoch bought the Journal and its parent company Dow Jones & Co after offering its controlling shareholders, the Bancroft family, a 65 percent premium on their shares. His success prompted speculation over whether the Ochs-Sulzberger clan would be the next to fall.

Cutting the dividend is important for the Times in a financial sense. It has about $1.1 billion of debt on its books as of its quarterly financial results in October, and a declining income stream to pay it off. It has $46 million in cash and cash equivalents.

"This was a difficult but necessary decision that will provide us with greater financial flexibility in these uncertain economic times," said Times Chairman and New York Times newspaper publisher Arthur Sulzberger Jr.

Sulzberger said the company has weathered difficult periods by maintaining its promise to provide high-quality journalism, and would take these actions to keep doing that.

Speculation in the media world is rampant that the Times must sell off some of its properties. Two years ago, General Electric Co's (GE.N) former chief executive Jack Welch was part of a group that bid for The Boston Globe. The company has resisted efforts from several dissident shareholders to get rid of some of its properties.

The Times, which also owns other U.S. daily papers around the country, also reported a 9.4 percent drop in revenue from continuing operations. Ad revenue fell 16.2 percent, while circulation revenue climbed 3.9 percent. (Reporting by Robert MacMillan; Editing by Toni Reinhold

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