* 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 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:
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
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
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
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
Analysts widely expect the company to reinstate a dividend
since it will have roughly $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 $700 million and
therefore is very manageable in the context of cash,
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."