New York Times outlook now negative - Moody's

NEW YORK, Aug 27 (Reuters) - Moody's Investors Service on Monday changed its outlook on the New York Times Co. (NYT.N) to negative, from stable, citing increased pressure on the publisher's advertising from other media as well as from a downturn in the housing market.

A negative outlook indicates the company's debt is likely to be downgraded over the next 12 to 18 months. The New York Times is currently ranked "Baa1," the third-lowest investment grade rating.

"The negative rating outlook results from increased pressure on the company's retail and classified advertising from cross media competition and the downturn in the housing market," Moody's said in a statement.

The Times is suffering from a downturn in print advertising as more people spend their time on the Internet and economic factors like the weakened U.S. housing market crimp marketing budgets.

A 31 percent increase in the company's quarterly dividend in March 2007, tax payments on recent asset sales and continued heavy capital spending through early 2008 will also challenge the company's ability to generate sufficient free cash flow to reduce its debt, Moody's said.

Debt to earnings before interest, taxes, depreciation and amortization had been previously expected to fall to 2.5 times in 2007, Moody's said.