* 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 Mark Thompson reported to work as the New
York Times Co chief executive on Monday, confronting
challenges ranging from making the publisher less dependent on
advertising to trimming costs and figuring out what to do with
its pile of cash.
Thompson is also dealing with questions pertaining to a
series of scandals at the BBC, where he served as
director-general from 2004 until September this year.
George Entwistle, who succeeded Thompson at the British
broadcaster, resigned on Saturday and two of its top news
directors stepped aside on Monday. [ID: nL5E8MC4BN]
The BBC has come under fire for its handling of two
investigations at its flagship news show, "Newsnight". One is a
massive sexual abuse scandal involving the late Jimmy Savile, a
former presenter at the network. The other is 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, an unaired program about Savile was produced while
Thompson was director-general of the broadcasting company.
In a staff memo obtained by Reuters, New York Times Chairman
Arthur Sulzberger welcomed Thompson but sidestepped addressing
the BBC scandals.
"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 ITV 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.
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 Company."
Still, the volley of news about the turmoil at BBC has been
coming fast across the Atlantic since a rival British
broadcaster aired a bombshell investigation about Savile in
There is little to suggest the pace will slacken as the
chairman of the BBC Trust called for a "thorough structural
radical overhaul" of the organization, and police and parliament
have opened inquiries.
Ken Doctor, an analyst with Outsell Research, said the BBC
scandals will replace "hackgate" - the phone hacking controversy
that shook News Corp's British newspaper arm - in the UK popular
press and in parliament.
Indeed, News Corp founder, Chairman and CEO Rupert
Murdoch, who has criticized the publicly funded BBC in the past,
tweeted on Saturday, "BBC getting into deeper mess. After Savile
scandal, now prominent news program falsely names senior pol as
Thompson said in a letter to British lawmakers he would be
happy to appear in front of the parliamentary committee or any
other inquiry in the future.
The British investigations into the BBC could prove to be a
distraction for Thompson if they are drawn out.
"It's clearly a distraction," Doctor said, who added that
he believes Thompson should have stepped aside over the weekend.
"How big, how long this is going to last is unknown. For
anybody who cares about the New York Times and its journalism
this is an unneeded distraction."
Doctor is another voice in a growing chorus to question
whether Thompson is fit to serve as CEO.
New York Times Public Editor Margaret Sullivan wrote on
Monday a second column about Thompson.
She praised the coverage in Times about the BBC saga and
Thompson, saying it "pulled no punches in reporting," and noted
that the scandal is being felt in New York.
"It's safe to say that everyone here - from the Times' board
of directors to the mail clerks - hopes that Mr. Sulzberger's
faith in Mr. Thompson will be rewarded," she wrote.
"What happens in London reverberates in New York. And the
chaos at the BBC - in which many of the people Mr. Thompson has
supervised stepped aside as recently as this past weekend -
feels uncomfortably close to home."
Thompson did not immediately respond to a request for
comment regarding Entwistle's resignation. Earlier, he declined
to be interviewed about his plans for the New York Times.
TAKING CARE OF BUSINESS
Thompson took the helm at the New York Times just weeks
after the company reported that it missed third-quarter revenue
and profit expectations, which sent its stock tumbling 22
percent. [ID: nL1E8LPE20][Breaking views: ID: nL3E8MC3NX]
His arrival on Monday marks the first time the company has
had a CEO since the abrupt ouster of Janet Robinson last
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 end the year with about $1 billion in cash, 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, Venkateshwar said.
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 - 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."