New York Times cuts dividend, "reevaluates" assets

By Robert MacMillan

NEW YORK (Reuters) - The New York Times Co slashed its dividend by almost three-quarters and plans to cut spending and reevaluate its assets to cope with an advertising decline that is gouging U.S. newspaper publishers.

The trustees of the Ochs-Sulzberger family's shares in the Times said on Thursday they support the company's actions.

"The trustees remain unanimous in their commitment to the editorial integrity and independence of the New York Times," they wrote in a statement.

This is significant because industry watchers and media experts say the family is under more pressure than ever before to sell parts or all of the company.

There has been speculation in the past that New York City Mayor Michael Bloomberg might be a willing buyer of the newspaper. Sulzberger has said the Times is not for sale. Bloomberg is the founder of the Bloomberg financial news and data service.

"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.

The Ochs-Sulzbergers own a special class of shares that give them more control than non-family shareholders. The decision to cut the dividend to 6 cents a share from 23 cents could be harder on younger members of the family, some of whom rely on that income.

One member of the family, Dave Golden, who was profiled in a New York magazine article about the younger Sulzbergers and whether they would support selling the company, went through a series of music bands, worked in paper mill in Finland, traveled the world and then released an album, according to his website.

The Times is under pressure from declining advertising revenue and circulation as more people get news online and as companies cut their marketing budgets because of the economy.

It also is under pressure from Rupert Murdoch, whose News Corp 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.

Two years ago, General Electric Co's former chief executive Jack Welch was part of a group that bid for the Times' Boston Globe.

MAKING THE CUT

Cutting the dividend is important for the Times because it will make more cash available to pay off debt. It has about $1.1 billion of debt on its books as of September, and $46 million in cash and equivalents.

Earlier increases to the dividend helped the Times's share price, but financial analysts warned that the move, while good for family members and other shareholders, was shortsighted as the newspaper industry began to tank.