New York Times Turns Out to Be a Good Investment as Media Falls Apart

By Douglas A. McIntyre Published Jan 26, 9:15AM EST

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While newspapers across the country are in trouble, The New York Times stands out.
New York Times Co. (NYSE: NYT) stock has outperformed the S&P 500 in the past year as the company shifts its business model.

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New York Times Turns Out to Be a Good Investment as Media Falls Apart — © Sezeryadigar / iStock via Getty Images

The Washington Post was one of America’s most respected newspapers. However, the paper announced today that it will not even send staff to the Olympics, as it has done for decades. Outsiders say this is another signal that the paper is in deep trouble. Across the country, most other newspapers are in trouble, as is much of the legacy media. The New York Times is not in trouble. As its revenue continues to jump, New York Times Co. (NYSE: NYT | NYT Price Prediction) stock has gained 34% in the past year, while the S&P 500 is up 14%.

The Times owes some of its success to the fact that it is based in New York City. However, there were nine papers in the city in 1950. The New York City newspaper business has been crippled as much as in any other city.

In the most recently reported quarter, the company’s revenue rose 9.5% to $700.8 million, and earnings increased by 28.2% to $0.50 per share. The more pertinent information is in the details. Advertising was up 11.8% to $132.3 billion. Subscription revenue grew 9.1% to $494.6 million. The Times has turned an advertising-driven business into one powered by subscriptions.

The Times has 12.3 million subscribers to the paper and other products. That is up from 11.1 million in the same period the year before. Just as important, the majority of these sales are “bundled,” which means people are paying for more than one product. Aside from The New York Times, these include The Athletic, Audio, Cooking, Games, and Wirecutter. So, much of what bundle subscribers receive are products that are barely journalism at all.

Management had forecast that the company would reach 10 million paid subscribers in 2025. It reached the level in 2022. Part of the reason for the increase was that the company bought the sports website The Athletic for $550 million in January 2022. The business bled money for at least two years. The Times, based on return on investment, may never get its money back. However, the company essentially replaced its entire sports department with The Athletic, which must have driven substantial savings.

Most people who admire the growth of the Times say that growth is based on the highest quality journalism in any American newspaper. While this is true, it is also based on clever management that saw several products were much better than one.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.