THE NEW York Times is expected to announce a price increase early next week as it races to shore up liquidity amid industry-wide falls in advertising revenues and circulation. The announcement comes as the New York Times is pushing for cost cuts from the struggling Boston Globe, which it purchased in 1993 for $1.1 billion.
The New York Times set the unions at the Globe a deadline, which was due to expire last night, to start talks over $20 million in cuts. It has threatened to close the Globe, which is expected to lose $85 million this year, if it fails to get the cost cuts through.
Wholesalers expect the New York Times to increase its price from $1.50 to $2 for Monday to Saturday editions and from $5 to $6 on Sundays. A spokeswoman declined to comment.
Recent sales figures suggest that the price rises could generate an incremental $40 million a year, although price increases have dented circulation at some newspapers.
The New York Times has strengthened its balance sheet by taking a high interest loan from Mexican billionaire Carlos Slim, who was the subject of a glowing tribute in the latest edition of Time magazine by Arthur Sulzberger Jr, the New York Times’ chairman and publisher.
The latest test of newspapers’ pricing power comes after steep falls in circulation for the leading US news titles during the six months to March. The New York Times’ weekday circulation fell 3.6 per cent, beating a sector-wide 7.1 per cent slump, according to the Audit Bureau of Circulations. It was not clear if price increases would be implemented for subscribers.
The New York Times raised the cover price of its Monday to Saturday editions by 25 cents to $1.50 last year, and its strategy reflects similar moves by other newspapers, including the Wall Street Journal, owned by News Corp, and the Financial Times, owned by Pearson. – (Copyright Financial Times Ltd 2009)
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