Shares of The New York Times Company (NYSE: NYT) are flat over the last month. In the meantime, the overall market is down 21%. Other newspaper stocks have done much worse. The Times has one thing very few other newspapers have. That is millions of readers who pay a large sum to be subscribers.

The Times has done remarkably well when compared to other large newspaper companies. The stock of the Tribune Publishing Company (NYSE: TPCO), which owns the Chicago Tribune and several large dailies has dropped 46% in the last month.

The McClatchy Company, another of the nation’s largest chains went bankrupt due to a big drop in revenue, high debt, and pension obligations. The company has a very modest number of paid subscribers, and they pay far less than people who get The New York Times do.

The newspaper advertising business is getting battered. Some experts believe local advertising has already dropped by 30%. That leaves local papers in a scramble for other lines of business. Some relief is, that for many, paid subscribers have risen as the tragedy progresses.

Last year, the New York Times had revenue of $1.3 billion, up 1%. Net income was $140 million, up 10%. At the end of the year, the Times has 4.4 million digital-only subscribers. That was an increase of 31% from the count at the end of 2018.

As contrast to The New York Times, McClatchy has 192,200 digital subscribers at the end of the third quarter. That was across 30 properties, which include The Chicago Tribune,  Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the Fort Worth Star-Telegram.

McClatchy did not post fourth-quarter results. In that quarter, revenue was $176 million, down from $191 million in the third quarter of 2018. Because of a huge writedown of assets that affected net income, adjusted EBITDA is a better measure. On that basis. McClatchy made $19 million, about the same as in the year-ago period.

The argument for the difference between the Times and other newspaper companies is that it has been able to keep a huge staff of journalists who cover local, national, and international news. It can also afford feature sections on the arts, travel, food, sports, business, technology, and science. Its journalism is robust enough that people will pay hundreds of dollars a year to get the paper, both in print and online. Almost all other dailies across the country have cut journalist staffs, and in some cases by more than half.

The New York Times will continue to thrive and the pandemic will probably help it add tens of thousands of new online subscribers at high prices. The balance of the industry will get more subscribers for the same reason. However, that will not offset the drop in revenue from print copies and sharply falling advertising.

The New York Times is completely different from the rest of the newspaper industry, and that difference will persist.

 

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