February 2, 2017 Last Updated 10:02 am

NYT Co. reports Q4 earnings: strong digital subscriptions gains offset by continued ad declines

Pension settlement charge led to lower net income, but overall the paper remains in the black, but commitment to circulation revenue is making paper far too dependent on its loyal readership for survival

The New York Times Company today reported its fourth quarter earnings before the markets opened. The report was highly anticipated due to the attacks the paper has dealt with from the new president, calling the Times a failing newspaper. Today report shows the paper continuing to struggle with revenue, but hardly failing.

Total revenue in Q4 fell 1.1 percent – led, as usual, with advertising declines. Ad revenue fell 9.7 percent, and 9.1 percent for the year that just ended. Circulation revenue almost made up the difference, but not quite. Circ revenue increased 5 percent, a nice number, no doubt helped by the election and the paper’s ongoing feud with the president.

For all of 2016, circulation revenue accounted for 56.6 percent of all revenue at the NYT.

Net income fell 27.2 percent in Q4, but the reason was technical, a pension settlement charge. Without that, net income would have actually beaten Q4 of the prior year.

Here it the most important thing, for the year net income was $23.832 million, 62.1 percent below the year prior, and dangerously close to breakeven. But, no, the NYT is not bleeding cash the way some newspaper are.

“The continued excellence of our journalism and our consumer-first focus led to incredible strength in our circulation business, both in the fourth quarter and for the full year,” said Mark Thompson, president and CEO. “As of today, we have passed the 3 million paid subscription mark (print and digital), a significant milestone.”

“In Q4, we added 276,000 net new digital news subscriptions, the single best quarter since 2011, the year the pay model launched. With the rate of growth accelerating over the past year, we believe that there is further opportunity to significantly extend our subscription reach, both in the U.S. and around the world.”

The publisher said digital ad revenue was up 11 percent in Q4, citing smartphone, marketing services, branded content and programmatic advertising.

“We continue to experience significant headwinds in print advertising, but the robustness of our consumer business, which we expect will continue, provides a strong counter balance to these market challenges. We will remain focused on our legacy cost base while continuing to invest in digital growth and innovation,” Thompson said.


Here is what a comparison of year-end 2006 and 2016 looks like:

NYT 2006 2016
Advertising $2,153,936, $580,732
Circulation $889,722 $880,543
Other $246,245 $94,067
Total Revenue $3,289,903 $1,555,342

Now, to begin with, this isn’t a dead-on apples-to-apples comparison. In 2006, the NYTCo was still publishing the New England group, so there was a bunch of revenue there. The paper also sold About.com between 2006 and today, as well (in 2012, to be exact).

What puzzles me is what the NYT is doing about its ad revenue declines? Yes, I get it, they are committed to digital subscriptions, but so is Apple committed to the iPhone. That doesn’t mean it has stopped selling Macs (though many wonder if, like the Times, it is having trouble walking and chewing gum at the same time).

What is it doing to beef up its print sales, its revenue in areas other than digital subscriptions? The NYT is so focused like a laser on digital subscriptions that one can imagine it one day it hitting $1 billion in circulation revenue (like maybe in 2017), but also falling to a third its total revenue it had a decade ago. It would be hard to keep a newsroom employed in that scenario.


As loyal TNM readers know, I have no phobia about advertising, having spent many years selling and managing sales staffs. One argument I often hear about the ad model is that it makes a publication dependent on the goodwill of its advertisers, and that may influence editorial. This is correct, it can, and if often does.

But let me also point out that the opinions of readers also influences editorial. It would have been hard for NYT editors not to notice the Gallup Poll released in March of 2003 that showed that 72 percent said they supported a war in Iraq. Did this influence NYT editors and make it easier for them to print some of stories they produced, that they eventually walked back?

If one believes that having a reader revenue model frees a publication from outside influence based on revenue considerations, then I would kindly ask that person to reconsider their beliefs.


Here are the financials:

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