NY Times CEO exiting, without explanation
NEW YORK (Reuters) - Janet Robinson will step down as chief executive of the New York Times Co at the end of the month, as the company continues to struggle with advertising declines and a years-long slump in its share price.
The problems plaguing newspaper companies are well known. Readers have ditched print for digital, causing circulation and advertising revenue to plummet. Newspaper company Lee Enterprises last week succumbed to industry changes and filed for bankruptcy protection.
Robinson, who steered the company through one of the harshest business environments it has ever faced, underscored the struggle her company faces during a presentation at the recent UBS investor conference in New York.
She said that fourth-quarter advertising revenue is expected to "improve slightly" from the previous quarter's 9 percent decline, putting a positive spin on yet another quarter of decreasing ad dollars.
The New York Times Co, which in addition to its flagship paper publishes The Boston Globe and the International Herald Tribune, among others, will begin a search for internal and external candidates to replace Robinson, 61.
Until then, publisher Arthur Sulzberger Jr. will oversee the company, the Times said in a statement announcing Robinson's planned retirement.
News of Robinson's planned departure coincides with the retirement of Martin Nisenholtz, the company's longtime digital leader, at the end of the year, meaning the Times Co will start 2012 without a CEO or digital boss.
The Times Co gave no explanation for Robinson's sudden departure, which caught analysts as well as company insiders by surprise. Speculation among industry observers and the analyst community centered on the company's faltering stock price, which has declined more than 80 percent since Robinson was appointed CEO in December 2004. This year alone, shares are down nearly 25 percent, a performance that has frustrated investors.
Times Co shares, which had traded in the mid-$30s during one point in Robinson's tenure, closed trading Thursday on the New York Stock Exchange up 1.8 percent, or 13 cents, to $7.53.
"It is very unusual to have a long-time CEO suddenly announce her leaving within two weeks with no replacement," said Evercore Partners analyst Douglas Arthur. "She's done a lot of good things but at the end of the day the stock price is the ultimate measure of success."
In a recent interview, Robinson said she considered it a "mandate to increase shareholder value," but argued she had done so through building a "multiplatform company" even during a period of "economic uncertainty and secular pressures."
Within the New York Times' newsroom, word of the shakeup began to spread about 20 minutes before the announcement.
"No one had an inkling this was coming," said a source at the paper, who declined to be named. "As recently as last week she was taking meetings with people and mapping out business plans for well into next year."
Robinson, who has worked at the company for nearly three decades, became president and chief executive officer in late 2004. In the following years, she was credited with lowering costs, improving the balance sheet and establishing a plan to charge for online content.
"Obviously, the last few years have been tough as, together, we have navigated one of the most difficult periods in publishing history," Robinson said in a memo to staff on Thursday. "It is probably an understatement to say that transitioning from a traditional print journalism model to the digital world has been an enormous challenge."
One success has been a meter-modeled pay wall instituted at the flagship New York Times, which grants digital readers access to 20 articles per month for free before requiring them to pay for additional content. Credit for that is owed more to Nisenholtz than Robinson, however.
The New York Times currently ranks second behind rival The Wall Street Journal in digital subscribers and third behind the WSJ and USA Today in print subscribers, according to the Audit Bureau of Circulations.
Robinson, who will stay on in a consulting role for the next year that will pay her $4.5 million, began her career as a school teacher before joining the Times Co in 1983 in sales.
The Falls River, Massachusetts-native -- who favors stark black dresses, bright red lipstick and pulled-back hair -- climbed the ranks of the women's magazine division before being put in charge of the company's newspaper unit.
The next CEO's overarching mandate will be the same as it is for every newspaper company, only more pronounced given the Times Co's exalted status: decrease print reliance by making digital subscriptions and advertising both the main and majority drivers of revenue.
Currently, print advertising accounts for 37 percent of the company's revenue versus just 14 percent for digital advertising. Circulation revenue, which includes both subscriptions and single-copy sales, ranks as the company's biggest revenue driver at 42 percent.
"My view is that they should find someone from outside," said Evercore's Arthur. "This is a very challenged industry undergoing a wrenching transformation and I think a strong outside candidate will be positive for the stock and for their strategy."
(Additional reporting by Peter Lauria in New York and Soham Chatterjee in Bangalore; Editing by Phil Berlowitz, Richard Chang, Gunna Dickson and Jim Marshall and Carol Bishopric)