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Article by DailyStocks_admin    (03-03-08 03:53 AM)

Firebrand Partners and Harbinger Capital Partners are seeking representation on the board of the New York Times. The pair of hedge funds said that they have raised their stake to about 16.9 million (11.82%) shares, after a Harbinger fund bought 793,000 Class A shares for $18.71 each on Feb. 15.

BUSINESS OVERVIEW

INTRODUCTION

The New York Times Company (the "Company") was incorporated on August 26, 1896, under the laws of the State of New York. The Company is a diversified media company that currently includes newspapers, Internet businesses, a radio station, investments in paper mills and other investments. Financial information about our segments can be found in "Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations" and in Note 17 of the Notes to the Consolidated Financial Statements. The Company and its consolidated subsidiaries are referred to collectively in this Annual Report on Form 10-K as "we," "our" and "us."

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports, and the Proxy Statement for our Annual Meeting of Stockholders are made available, free of charge, on our Web site http://www.nytco.com , as soon as reasonably practicable after such reports have been filed with or furnished to the SEC.

We classify our businesses based on our operating strategies into two segments, the News Media Group and the About Group.

The News Media Group consists of the following:

– The New York Times Media Group, which includes The New York Times ("The Times"), NYTimes.com, the International Herald Tribune (the "IHT"), IHT.com, our New York City radio station, WQXR-FM and related businesses;

– the New England Media Group, which includes The Boston Globe (the "Globe"), Boston.com, the Worcester Telegram & Gazette, in Worcester, Massachusetts (the "T&G"), the T&G's Web site, Telegram.com and related businesses; and

– the Regional Media Group, which includes 14 daily newspapers in Alabama, California, Florida, Louisiana, North Carolina and South Carolina and related businesses.

The About Group consists of the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Calorie-Count.com. Calorie-Count.com, acquired on September 14, 2006, offers weight loss tools and nutritional information. UCompareHealthCare.com, acquired on March 27, 2007, provides dynamic Web-based interactive tools to enable users to measure the quality of certain healthcare services. ConsumerSearch.com, acquired on May 4, 2007, is a leading online aggregator and publisher of reviews of consumer products.

Additionally, we own equity interests in a Canadian newsprint company and a supercalendered paper manufacturing partnership in Maine; approximately 17.5% in New England Sports Ventures, LLC ("NESV"), which owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80% of New England Sports Network (the regional cable sports network that televises the Red Sox games) and 50% of Roush Fenway Racing, a leading NASCAR team; and 49% of Metro Boston LLC ("Metro Boston"), which publishes a free daily newspaper catering to young professionals and students in the Greater Boston area.

On May 7, 2007, we sold our Broadcast Media Group, consisting of nine network-affiliated television stations, their related Web sites and the digital operating center, to Oak Hill Capital Partners, for approximately $575 million. The Broadcast Media Group is no longer included as a separate reportable segment of the Company and, in accordance with Statement of Financial Accounting Standards ("FAS") No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Broadcast Media Group's results of operations are presented as discontinued operations and certain assets and liabilities are classified as held for sale for all periods presented before the Group's sale (see Note 4 of the Notes to the Consolidated Financial Statements). For purposes of comparability, certain prior year information has been reclassified to conform with this presentation.

On April 26, 2007, we sold a radio station, WQEW-AM, to Radio Disney, LLC for $40 million. Radio Disney had been providing substantially all of the station's programming through a time brokerage agreement since December 1998.

In October 2006, we sold our 50% ownership interest in Discovery Times Channel, a digital cable television channel, to Discovery Communications, Inc., for $100 million.

Revenue from individual customers and revenues, operating profit and identifiable assets of foreign operations are not significant.

Seasonal variations in advertising revenues cause our quarterly results to fluctuate. Second- and fourth-quarter advertising volume is typically higher than first- and third-quarter volume because economic activity tends to be lower during the winter and summer.

NEWS MEDIA GROUP

The News Media Group segment consists of The New York Times Media Group, the New England Media Group and the Regional Media Group.

Advertising Revenue

The majority of the News Media Group's revenue is derived from advertising sold in its newspapers and other publications and on its Web sites, as discussed below. We divide such advertising into three basic categories: national, retail and classified. Advertising revenue also includes preprints, which are advertising supplements. Advertising revenue and print volume information for the News Media Group appears under "Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations."

The New York Times Media Group

The New York Times

The Times, a daily (Monday through Saturday) and Sunday newspaper, commenced publication in 1851.

Circulation

The Times is circulated in each of the 50 states, the District of Columbia and worldwide. Approximately 47% of the weekday (Monday through Friday) circulation is sold in the 31 counties that make up the greater New York City area, which includes New York City, Westchester, Long Island, and parts of upstate New York, Connecticut, New Jersey and Pennsylvania; 53% is sold elsewhere. On Sundays, approximately 42% of the circulation is sold in the greater New York City area and 58% elsewhere. According to reports filed with the Audit Bureau of Circulations ("ABC"), an independent agency that audits the circulation of most U.S. newspapers and magazines, for the six-month period ended September 30, 2007, The Times had the largest daily and Sunday circulation of all seven-day newspapers in the United States.

The decreases in weekday and Sunday copies sold in 2007 compared with 2006 were due to declines in home-delivery subscriptions, single copy sales and sponsored third-party sales due in part to our circulation strategy.

Approximately 62% of the weekday and 71% of the Sunday circulation was sold through home-delivery in 2007; the remainder was sold primarily on newsstands.

According to Mediamark Research & Intelligence, a provider of magazine audience and multi-media research data, and Nielsen Online, an Internet traffic measurement service, The Times reached approximately 19.1 million unduplicated readers in the United States in December 2007 via the weekday and Sunday newspaper, and NYTimes.com.

Advertising

According to data compiled by TNS Media Intelligence, an independent agency that measures advertising sales volume and estimates advertising revenue, The Times had a 50% market share in 2007 in advertising revenue among a national newspaper set that includes USA Today, The Wall Street Journal and The New York Times. Based on recent data provided by TNS Media Intelligence, The Times believes that it ranks first by a substantial margin in advertising revenue in the general weekday and Sunday newspaper field in the New York City metropolitan area.

Production and Distribution

The Times is currently printed at its production and distribution facilities in Edison, N.J., and College Point, N.Y., as well as under contract at 21 remote print sites across the United States and one in Toronto, Canada. The Times intends to add an additional print site under contract in 2008.

We are consolidating our New York metro area printing into our newer facility in College Point, N.Y., and closing our older Edison, N.J., facility. As part of the consolidation, we purchased the Edison, N.J., facility and then sold it, with two adjacent properties we already owned, to a third party. The purchase and sale of the Edison, N.J., facility closed in the second quarter of 2007, relieving us of rental terms that were above market as well as certain restoration obligations under the original lease. The plant consolidation is expected to be completed in the first quarter of 2008.

Our subsidiary, City & Suburban Delivery Systems, Inc. ("City & Suburban"), operates a wholesale newspaper distribution business that distributes The Times and other newspapers and periodicals in New York City, Long Island (N.Y.), New Jersey and the counties of Westchester (N.Y.) and Fairfield (Conn.). In other markets in the United States and Canada, The Times is delivered through various newspapers and third-party delivery agents.

NYTimes.com

The Times's Web site, NYTimes.com, reaches wide audiences across the New York metropolitan region, the nation and around the world. According to Nielsen Online, average monthly unique visitors in the United States viewing NYTimes.com reached 14.7 million in 2007 compared with 12.4 million in 2006.

NYTimes.com derives its revenue primarily from the sale of advertising. Advertising is sold to both national and local customers and includes online display advertising (banners, half-page units, interactive multi-media), classified advertising (help-wanted, real estate, automobiles) and contextual advertising (links supplied by Google). In 2007, The Times discontinued TimesSelect, a product offering subscribers exclusive online access to columnists of The Times and the IHT and to The Times's archives.

On August 28, 2006, we acquired Baseline StudioSystems ("Baseline"), a leading online subscription database and research service for information on the film and television industries. Baseline's financial results are part of NYTimes.com.

International Herald Tribune

The IHT, a daily (Monday through Saturday) newspaper, commenced publishing in Paris in 1887, is printed at 35 sites throughout the world and is sold in more than 180 countries. The IHT's average circulation for the years ended December 30, 2007, and December 31, 2006, were 241,852 (estimated) and 242,073. These figures follow the guidance of Diffusion Controle, an agency based in Paris and a member of the International Federation of Audit Bureaux of Circulations that audits the circulation of most of France's newspapers and magazines. The final 2007 figure will not be available until April 2008. In 2007, 60% of the circulation was sold in Europe, the Middle East and Africa, 38% was sold in the Asia Pacific region and 2% was sold in the Americas.

The IHT's Web site, IHT.com, reaches wide audiences around the world. According to IHT's internal reports, average unique visitors to IHT.com reached 4.6 million per month in 2007 compared with 3.1 million per month in 2006.

Other Businesses

The New York Times Media Group's other businesses include:

– The New York Times Index, which produces and licenses The New York Times Index, a print publication,

– Digital Archive Distribution, which licenses electronic archive databases to resellers of that information in the business, professional and library markets, and

– The New York Times News Services Division. The New York Times News Services Division is made up of Syndication Sales, which transmits articles, graphics and photographs from The Times, the Globe and other publications to over 1,000 newspapers and magazines in the United States and in more than 80 countries worldwide; Business Development, which comprises Photo Archives, Book Development, Rights & Permissions, licensing and a small publication unit; and New York Times Radio, which includes our New York City classical music radio station, WQXR-FM, and New York Times Radio News, which creates Times-branded content for a variety of audio platforms, including newscasts, features and podcasts. Our radio station is operated under a license from the FCC and is subject to FCC regulation. Radio license renewals are typically granted for terms of eight years. The license renewal application for WQXR was granted for an eight-year term expiring June 1, 2014.

On April 26, 2007, we completed the sale of a radio station, WQEW-AM, which was part of The New York Times Media Group, to Radio Disney, LLC for $40 million. Radio Disney had been providing substantially all of WQEW's programming through a time brokerage agreement since December 1998.

New England Media Group

The Globe, Boston.com, the T&G, and Telegram.com constitute our New England Media Group. The Globe is a daily (Monday through Saturday) and Sunday newspaper, which commenced publication in 1872. The T&G is a daily (Monday through Saturday) newspaper, which began publishing in 1866. Its Sunday companion, the Sunday Telegram, began in 1884.

Circulation

The Globe is distributed throughout New England, although its circulation is concentrated in the Boston metropolitan area. According to ABC, for the six-month period ended September 30, 2007, the Globe ranked first in New England for both daily and Sunday circulation volume.

The decreases in weekday and Sunday copies sold in 2007 compared with 2006 were due in part to a directed effort to improve circulation profitability by reducing steep discounts on home-delivery copies and by decreasing the Globe's less profitable other-paid circulation (primarily hotel and third-party copies sponsored by advertisers). Third-party copies are less desired by advertisers than those bought by individuals on the newsstand or through subscription.

Approximately 74% of the Globe's weekday circulation and 72% of its Sunday circulation was sold through home-delivery in 2007; the remainder was sold primarily on newsstands.

According to Scarborough Research, the average unduplicated readers of the Globe, via the weekday and Sunday newspaper, and visitors of Boston.com reached approximately 2.3 million per month in the Boston local market in 2007.

The T&G, the Sunday Telegram and several Company-owned non-daily newspapers – some published under the name of Coulter Press – circulate throughout Worcester County and northeastern Connecticut.

Advertising

Based on information supplied by major daily newspapers published in New England and assembled by the New England Newspaper Association, Inc. for the year ended December 30, 2007, the Globe ranked first and the T&G ranked seventh in advertising inches among all daily newspapers in New England.

Production and Distribution

All editions of the Globe are printed and prepared for delivery at its main Boston plant or its Billerica, Mass. satellite plant. Virtually all of the Globe's home-delivered circulation was delivered in 2007 by a third-party service provider.

Boston.com

The Globe's Web site, Boston.com, reaches wide audiences in the New England region, the nation and around the world. In the United States, according to Nielsen Online, average unique visitors to Boston.com reached 4.3 million per month in 2007 compared with 4.0 million per month in 2006.

Boston.com primarily derives its revenue from the sale of advertising. Advertising is sold to both national and local customers and includes Web site display advertising, classified advertising and contextual advertising.

Regional Media Group

The Regional Media Group includes 14 daily newspapers, of which 12 publish on Sunday, one paid weekly newspaper, related print and digital businesses, free weekly newspapers, and the North Bay Business Journal, a weekly publication targeting business leaders in California's Sonoma, Napa and Marin counties.

CEO BACKGROUND
RAUL E. CESAN
Founder and Managing Partner, Commercial Worldwide LLC (investments) (from 2001)
President and Chief Operating Officer of Schering-Plough Corporation (from 1998 to 2001), Executive Vice President of Schering-Plough Corporation and President of Schering-Plough Pharmaceuticals (from 1994 to 1998), President of Schering Laboratories (from 1992 to 1994), President of Schering-Plough International (from 1988 to 1992)
Audit (Chair) and Finance

WILLIAM E. KENNARD
Managing Director, The Carlyle Group (from 2001)
Chairman of the Federal Communications Commission (from 1997 to 2001), General Counsel of the Federal Communications Commission (from 1993 to 1997)
Sprint Nextel Corporation
Nominating & Governance (Chair) and Finance



JAMES M. KILTS
Vice Chairman of the Board of The Procter & Gamble Company (from October 2005 to October 2006); President (from 2003 to October 2005), Chairman of the Board and Chief Executive Officer (from 2001 to October 2005), The Gillette Company; President and Chief Executive Officer (from 1999 to 2000), Nabisco Group Holdings Corp.; President and Chief Executive Officer (from 1998 to 1999), Nabisco Holdings Corp and Nabisco Inc.; Executive Vice President, Worldwide Food (from 1994 to 1997), Phillip Morris Companies; President (from 1989 to 1994), Kraft USA and Oscar Mayer; President, Kraft Limited in Canada; Senior Vice President, Kraft International
MeadWestvaco Corporation, MetLife, Inc. and VNU Group B.V. (Supervisory Board Member)
Audit and Finance


DOREEN A. TOBEN
Executive Vice President and Chief Financial Officer, Verizon Communications, Inc. (from 2002)
Senior Vice President and Chief Financial Officer, Telecom Group, Verizon Communications, Inc. (from 2000 to 2002); Vice President and Controller (from 1999 to 2000) and Vice President and Chief Financial Officer, Telecom/Network, Bell Atlantic Inc. (from 1997 to 1999)
Verizon Wireless Inc.
Audit and Foundation

SHARE OWNERSHIP

1.
The amounts reported include shares of Class A stock which could be acquired within 60 days upon the exercise of stock options under the Directors' Plans, as follows: Ms. Barnes: 36,000; Mr. Cesan: 32,000; Mr. Kennard: 19,000; Mr. Kilts: 4,000; Dr. Liddle: 28,000; Ms. Marram: 36,000; Dr. Middelhoff: 12,000; and Ms. Toben: 12,000.

2.
Class B stock is convertible into Class A stock on a share-for-share basis. Ownership of Class B stock is therefore deemed to be beneficial ownership of Class A stock under SEC regulations. For purposes of the presentation of ownership of Class A stock in this table, it has been assumed that each Director and executive officer has converted into Class A stock all shares of Class B stock of which that person is deemed the beneficial owner. Thus all shares of Class B stock held by the Directors and executive officers, including shares held by the 1997 Trust, have been included in the calculation of the total amount of Class A stock owned by such persons as well as in the calculation of the total amount of Class B stock owned by such persons. As a result of this presentation, there are duplications in the number of shares and percentages shown in this table.

3.
See "Principal Holders of Common Stock" and "The 1997 Trust" for a discussion of this person's holdings.

4.
The amounts reported include shares of Class A stock which could be acquired within 60 days upon the exercise of stock options under the NYT Stock Plan, as follows: Mr. Forman: 459,245 shares; Mr. Heekin-Canedy: 149,560 shares; and Ms. Robinson: 502,750 shares. Also, the amounts reported include restricted shares and restricted stock units of Class A stock granted under the NYT Stock Plan as follows: Mr. Forman: 35,300 shares (which shares and units vest in connection with Mr. Forman's retirement); Mr. Heekin-Canedy: 23,387 shares and Ms. Robinson: 169,500 shares.

5.
Effective December 31, 2006, Mr. Forman retired as the Company's chief financial officer.

6.
Includes the holdings of Mr. Follo, who became chief financial officer on January 8, 2007, and excludes the holdings of Mr. Forman.

MANAGEMENT DISCUSSION FROM LATEST 10K

News Media Group

The News Media Group generates revenues principally from print, online and radio advertising and through circulation. Other revenues, which make up the remainder of its revenues, primarily consist of revenues from wholesale delivery operations, news services/syndication, commercial printing, advertising service revenue, digital archives, TimesSelect (for periods before October 2007), Baseline and rental income. The News Media Group's main operating costs are employee-related costs and raw materials, primarily newsprint.

About Group

The About Group principally generates revenues from display advertising that is relevant to its adjacent content, cost-per-click advertising (sponsored links for which the About Group is paid when a user clicks on the ad), and e-commerce (including sales lead generation). Almost all of its revenues (95% in 2007) are derived from the sale of advertisements (display and cost-per-click advertising). Display advertising accounted for 51% of the About Group's total advertising revenues. The About Group's main operating costs are employee-related costs and content and hosting costs.

Joint Ventures

Our investments accounted for under the equity method are as follows:

– a 49% interest in Metro Boston, which publishes a free daily newspaper in the Greater Boston area,

– a 49% interest in a Canadian newsprint company, Malbaie,

– a 40% interest in a partnership, Madison, operating a supercalendered paper mill in Maine, and

– an approximately 17.5% interest in NESV, which owns the Boston Red Sox, Fenway Park and adjacent real estate, approximately 80% of the New England Sports Network, a regional cable sports network, and 50% of Roush Fenway Racing, a leading NASCAR team.

Broadcast Media Group

On May 7, 2007, we sold the Broadcast Media Group, consisting of nine network-affiliated television stations, their related Web sites and the digital operating center, for approximately $575 million. This decision was a result of our ongoing analysis of our business portfolio and has allowed us to place an even greater emphasis on developing and integrating our print and growing digital businesses. We recognized a pre-tax gain on the sale of $190.0 million ($94.0 million after tax, or $.65 per share) in 2007, and we used the cash proceeds from the sale to repay our outstanding commercial paper obligation. The Broadcast Media Group is no longer included as a separate reportable segment of the Company. In accordance with FAS 144, the Broadcast Media Group's results of operations are presented as discontinued operations and certain assets and liabilities are classified as held for sale for all periods presented before the Group's sale.

Business Environment

We operate in the highly competitive media industry. We believe that a number of factors and industry trends have had, and will continue to have, a fundamental effect on our business and prospects. These include:

Increasing competition

Competition for advertising revenue that our businesses face affects our ability both to attract and retain advertisers and consumers and to maintain or increase our advertising rates. We expect technological developments will continue to favor digital media choices, intensifying the challenges posed by audience fragmentation.

We have expanded and will continue to expand our digital offerings; however, most of our revenues are currently from traditional print products. Our print advertising revenues have declined. We believe that this decline, particularly in classified advertising, is due to a shift to digital media or to other forms of media and marketing.

Economic conditions

Our advertising revenues, which account for approximately 63% of our News Media Group revenues, are susceptible to economic swings. National and local economic conditions, particularly in the New York City and Boston metropolitan regions, as well as in Florida and California, affect the levels of our national, classified and retail advertising revenue.

In addition, a significant portion of our advertising revenues comes from studio entertainment, financial services, telecommunications, real estate and department store advertising. Real estate advertising, our largest classified category, was affected, and continues to be affected, by the nationwide slowdown in the housing market. Consolidation among key advertisers and changes in spending practices or priorities has depressed, and may continue to depress, our advertising revenue. We believe that categories that have historically generated significant amounts of advertising revenues for our businesses are likely to continue to be challenged in 2008. These include telecommunications and real estate advertising.

Circulation

Circulation is another significant source of revenue for us. In recent years, we, along with the newspaper industry as a whole, have experienced difficulty increasing circulation volume. This is due to, among other factors, increased competition from new media formats and sources, and shifting preferences among some consumers to receive all or a portion of their news from sources other than a newspaper.

Costs

Our most significant costs are employee-related costs and raw materials, which together account for approximately 50% of total costs. Changes in the price of newsprint or in employee-related costs can materially affect our operating results.

For a discussion of these and other factors that could affect our results of operations and financial condition, see "Forward-Looking Statements" and "Item 1A – Risk Factors."

Our Strategy

We anticipate that the challenges we currently face will continue, and we believe that the following elements are key to our efforts to address them.

New products and services

We are addressing the increasingly fragmented media landscape by building on the strength of our brands, particularly of The New York Times. Because of our high-quality content, we have very powerful and trusted brands that attract educated, affluent and influential audiences. To further leverage these brands, we have introduced and will continue to introduce a number of new products and services in print and online. We want to offer our customers news, information and entertainment wherever and whenever our audience want it and even in some ways they may not have envisioned in print or online, wireless or mobile, in text, graphics, audio, radio, video or even live events.

In 2007, our new products and services included new specialty magazines and print publications in New York, Boston and at the IHT, new print ad formats, and the expansion of the "T" magazine franchise in print, online and internationally.

Growth in Digital Operations

Online, our goal is to grow our digital businesses by broadening our audiences, deepening engagement and monetizing the usage of our sites. We have a more diversified revenue base mainly because NYTimes.com attracts a diverse base of national advertisers and About.com generates most of its revenues from display and cost-per-click advertising. Our goal for NYTimes.com is to build a fully interactive, news and information platform, achieving sustainable leadership positions in our most profitable content areas or verticals. We have made and plan to continue to make investments to grow our Web sites that have the highest advertiser demand.

In 2007, we concentrated on building out NYTimes.com's verticals in health, business and technology. We also strengthened our verticals at the About Group with acquisitions, particularly in health and increased editorial content by adding guides. We redesigned Boston.com and formed a strategic alliance with Monster Worldwide, Inc. to further build our online recruitment product offerings and enabled our online advertisers to buy across all our Web sites. In 2007, we acquired UCompareHealthCare.com, a site that provides consumers with access to quality ratings and related information on hospitals, nursing homes and doctors; and ConsumerSearch.com, a leading online aggregator and publisher of reviews of consumer products. All of these acquisitions leverage the About Group's audience scale by delivering traffic and more advertising opportunities to these sites.

Research and development capabilities

We are also trying to capitalize on the capabilities of our research and development team. This group stimulates innovation and cultural change as we rebalance our businesses for a more digital world. It anticipates consumer preferences and devises ways to satisfy them. Our R&D team has helped to: create new products and improve our brands, such as NYTimes.com's launch of a new product that allows readers to send and receive real estate listings on their mobile devices; develop new capabilities such as data mining and Web analytics; and pursue new relationships with leading Web entities, which should contribute to more cost-per-click advertising, increased presence on the Web and search services channeling traffic to our Web sites.

Rebalanced portfolio

We continually evaluate our businesses to determine whether they are meeting our targets for financial performance, growth and return on investment and whether they remain relevant to our strategy.

As a result of this analysis, in April 2007, we sold a radio station WQEW-AM and in May 2007 we sold our Broadcast Media Group in order to allow us to focus on developing our print and digital businesses.

We have made selective acquisitions and investments in 2007, such as the acquisitions of ConsumerSearch.com and UCompareHealthCare.com, consistent with our commitment to developing our digital businesses.

Cost management

Managing costs is a key component of our strategy. We continuously review our cost structure to ensure that we are operating our businesses efficiently. Our focus is on streamlining our operations and achieving cost benefits from productivity gains.

To reduce distribution costs and expand national circulation we added another print site for The New York Times in Salt Lake City in 2007, and a site in Dallas in January 2008, with an additional site scheduled to open later in 2008.

As part of our efforts to reduce costs, we are in the process of consolidating our New York metro area printing into our newer facility in College Point, N.Y., and closing our older Edison, N.J., facility. We expect to complete the plant consolidation in the first quarter of 2008. With the plant consolidation, we expect to save $30 million in lower operating costs annually and to avoid the need for approximately $50 million in capital investment at the Edison, N.J., facility over the next 10 years. We expect to make capital expenditures in the aggregate of $150 million to $160 million related to the plant consolidation project.

As part of the plant consolidation, we estimate costs to close the Edison, N.J., facility in the range of $87 million to $95 million, principally consisting of accelerated depreciation charges ($66 to $69 million), as well as staff reduction charges ($16 to $20 million) and plant restoration costs ($5 to $6 million). The majority of these costs have been recognized as of December 30, 2007, with the remaining amount to be recognized in the first quarter of 2008.

We reduced the size of all editions of The Times, the Globe, the T&G and four of our Regional Media Group papers. With the web-width reductions, we expect to save approximately $12 million annually from decreased newsprint consumption.

We have shifted away from less profitable circulation by reducing promotion, production, distribution and other related costs.

The majority of savings are expected to come from newly identified initiatives that will involve standardizing, streamlining, and consolidating processes and shifting staff to lower cost locations. The areas that present the greatest opportunity are general and administrative, production, technology, distribution and circulation sales.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

We are a leading media and news organization serving our audiences through print, online and mobile technology. Our segments and divisions are:



News Media Group (consisting of The New York Times Media Group, which principally includes The New York Times (“The Times”), NYTimes.com, the International Herald Tribune and WQXR-FM; the New England Media Group, which principally includes The Boston Globe (the “Globe”), Boston.com and the Worcester Telegram & Gazette; and the Regional Media Group, which includes 14 daily newspapers and their related digital operations). The News Media Group generates revenues principally from print, online and radio advertising and through circulation. Other revenues, which make up the remainder of revenues, primarily consist of revenues from wholesale delivery operations, news services/syndication, digital archives, TimesSelect, Baseline StudioSystems, rental income and commercial printing. The News Media Group’s main operating costs are employee-related costs and raw materials, primarily newsprint.



About Group (consisting of the Web sites of About.com, ConsumerSearch.com, UCompareHealthCare.com and Calorie-Count.com). The About Group principally generates revenues from display advertising relevant to its adjacent content, cost-per-click advertising (sponsored links for which the About Group is paid when a user clicks on the ad) and e-commerce (including sales lead generation). Almost all of its revenues (95% in the first nine months of 2007) are derived from the sale of advertisements (display and cost-per-click advertising). Cost-per-click advertising accounts for 49% of the About Group’s total advertising revenues. The About Group’s main operating costs are employee-related costs and content and hosting costs.



Joint Ventures Our investments accounted for under the equity method are as follows:



• a 49% interest in Metro Boston LLC, which publishes a free daily newspaper catering to professionals and students in the Greater Boston area,



• a 49% interest in a Canadian newsprint company, Donohue Malbaie Inc.,



• a 40% interest in a partnership, Madison Paper Industries, operating a supercalendered paper mill in Maine, and



• an approximately 17% interest in New England Sports Ventures, which owns the Boston Red Sox, Fenway Park and adjacent real estate, 80% of the New England Sports Network, a regional cable sports network, and 50% of Roush Fenway Racing, a leading NASCAR team.



RECENT DEVELOPMENTS



Broadcast Media Group Sale



On May 7, 2007, we sold the Broadcast Media Group, consisting of nine network-affiliated television stations, their related Web sites and the digital operating center, for approximately $575 million. This decision was a result of our ongoing analysis of our business portfolio and has allowed us to place an even greater emphasis on developing and integrating our print and growing digital resources. We recognized a pre-tax gain on the sale of $189.9 million ($93.7 million after-tax) for the first nine months of 2007, and we used the cash proceeds of the sale to repay our outstanding commercial paper.



Acquisitions



On May 4, 2007, we acquired ConsumerSearch, Inc., a leading online aggregator and publisher of consumer product reviews, for approximately $33 million.



On March 27, 2007, we acquired UCompareHealthCare.com, a site that provides dynamic Web-based interactive tools to consumers to enable them to measure the quality of certain healthcare services, for $2.3 million.



The operating results of these acquisitions are included within the operating results of the About Group from the dates of acquisition. See Note 3 of the Notes to the Condensed Consolidated Financial Statements.



Sale of WQEW-AM



On April 26, 2007, we sold WQEW-AM (“WQEW”) to Radio Disney, LLC (which had been providing substantially all of WQEW programming through a licensing agreement) for $40 million. We recognized a pre-tax gain of $39.6 million ($21.2 million after-tax) in the second quarter of 2007.



Plant Consolidation



We are in the process of consolidating the printing operations of a facility we lease in Edison, N.J., into our newer facility in College Point, N.Y. The plant consolidation is part of our expense reduction initiatives and is expected to be completed in the second quarter of 2008. As part of the consolidation, we originally planned to sublease the Edison facility through 2018, the end of the then-existing lease term. After evaluating the options with respect to the original lease, we decided it was financially prudent to purchase the Edison facility and sell it, with two adjacent properties we already owned, to a third party. The purchase and sale of the Edison facility closed in the second quarter of 2007, relieving us of rental terms that were above market as well as certain restoration obligations under the original lease. As a result of the sale, we recognized a pre-tax loss of $68.2 million ($41.3 million after-tax) in the second quarter of 2007.



In addition to the loss mentioned above, we estimate costs to close the Edison facility as follows:



• $66 to $69 million for accelerated depreciation expense, of which approximately $57 million has been recognized through September 30, 2007. The remainder will be recognized through the end of the first quarter of 2008 ($6 to $7 million in the fourth quarter of 2007; and $3 to $5 million in the first quarter of 2008). This expense is for the acceleration of depreciation expense for assets that we continue to own at the Edison facility, mainly printing presses.



• $16 to $20 million for staff reduction costs, of which approximately $1 million was recorded as of September 30, 2007, with the majority of the remaining amount to be recorded in the fourth quarter of 2007. As part of the consolidation, we expect a workforce reduction of approximately 300 full-time equivalent employees.



• $5 to $6 million in other costs, mainly restoration costs, under the new Edison lease, of which approximately $2 million was recorded as of September 30, 2007. The remainder will be recognized through the end of the second quarter of 2008.



Capital expenditures for the plant consolidation are estimated to be $135 to $147 million, a significant portion of which will be made in 2007. We expect to save $30 million annually due to lower operating costs and have avoided the need for approximately $50 million in capital investment at the Edison facility over the next ten years.

The New York Times Media Group


Advertising revenues increased in the third quarter of 2007 primarily due to higher print and online advertising. Higher print rates and higher volume in online advertising more than offset lower print volume. Print and online advertising revenues increased 1.8% and 23.8%, respectively, in the third quarter of 2007. Advertising revenues decreased in the first nine months of 2007 primarily due to lower print advertising revenue, partially offset by higher online advertising. Lower print volume more than offset higher print rates and higher volume in online advertising. Print advertising revenues declined 4.0% in the first nine months of 2007, while online advertising revenues increased 21.3% in the same period.



National advertising, which represents approximately 66% of the Group’s advertising revenues, increased in the third quarter of 2007 due to increases in a variety of categories, particularly studio entertainment, international fashion and corporate advertising. In particular, studio entertainment benefited from the success of a special Times film section and increased advertising for a number of films. For the first nine months of 2007, national advertising increased mainly because of growth in online advertising.



Classified advertising, which represents approximately 19% of the Group’s advertising revenues, decreased in the third quarter and first nine months of 2007, principally due to declines in the print real estate, automotive and recruitment categories. The declines in real estate reflect the slowdown in the local and national housing markets and a shift in advertising to online alternatives.



Retail advertising, which represents approximately 12% of the Group’s advertising revenues, decreased in the third quarter and the first nine months of 2007 principally because of softness in national chain store, home furnishing store and department store advertising.


New England Media Group


Advertising revenues were lower in the third quarter and for the first nine months of 2007 primarily due to lower print volume in the classified and retail advertising categories.



Classified advertising, which represents approximately 38% of the Group’s advertising revenues, decreased in the third quarter and first nine months of 2007, principally because of declines in real estate advertising, which was negatively affected by the soft housing market in the Northeast, and softness in the automotive and recruitment categories.



Retail advertising, which represents approximately 29% of the Group’s advertising revenues, also decreased. Advertising revenues in the third quarter of 2007 decreased due to declines in a number of categories including the food and drug and computer/office supply categories, while weakness in the first nine months of 2007 was principally due to reduced spending in department store advertising, as a result of the consolidation of two large retailers, as well as food and drug advertising.



National advertising, which represents approximately 27% of the Group’s advertising revenues, increased in the third quarter and first nine months of 2007 mainly because of growth in online advertising.


Regional Media Group


Advertising revenues decreased in the third quarter and the first nine months of 2007, primarily due to weakness in print classified and retail advertising, which was partially offset by growth in online advertising.



Retail advertising, which represents approximately 49% of the Group’s advertising revenues, decreased in the third quarter of 2007 mainly due to reduced spending in home furnishings, department store and telecommunications advertising. In the first nine months of 2007, retail advertising declined principally due to reduced spending in home furnishings, banking and department store advertising.



Classified advertising, which represents approximately 41% of the Group’s advertising revenues, decreased across all print categories in the third quarter and first nine months of 2007. In the third quarter and for the first nine months of 2007, much of the decline was related to the downturn in the Florida and California housing markets, which continues to affect not only real estate but recruitment and retail advertising as well. About two-thirds of the advertising revenues at the Regional Media Group come from newspapers in Florida and California.



Circulation Revenues



Circulation revenue is based on the number of copies sold and the rate charged to customers. At The Times and our other newspapers, our strategy is to reduce other-paid circulation and to focus promotional spending on individually paid circulation, which is generally more valued by advertisers. While we expect this strategy to result in copy declines, we believe it will result in reduced costs and improved circulation profitability.



Circulation revenues in the third quarter of 2007 increased 3.9% compared with the third quarter of 2006 mainly because of higher prices for The Times partially offset by volume declines. In the fourth quarter of 2006, The Times raised the newsstand price of the Northeast edition of the Sunday Times and increased home-delivery prices. In the third quarter of 2007, The Times raised the newsstand price of the Sunday Times in the greater New York metropolitan area and the daily newsstand price nationwide and increased home-delivery prices. At the New England Media Group and Regional Media Group, circulation revenues declined primarily due to lower volume.



In the first nine months of 2007, circulation revenues increased 1.5% compared with the same prior-year period mainly because of higher prices for The Times, partially offset by fewer copies sold across the News Media Group.

Other Revenues



Other revenues increased in the third quarter of 2007 primarily because of revenues from rental income from our lease of five floors in our new headquarters, increased wholesale delivery operation revenues and revenues from Baseline StudioSystems. Baseline, which was acquired in August 2006, is a leading online database and research subscription service for information on the film and television industries. For the first nine months of 2007, other revenues increased mainly due to increased revenues from Baseline, wholesale delivery operations and rental income as noted above.


About Group


About Group revenues increased 34.9% to $24.7 million in the third quarter of 2007 from $18.3 million in the third quarter of 2006, and 28.6% to $72.0 million in the first nine months of 2007 compared with $56.0 million in the same period last year. The increases were primarily due to higher advertising rates and increased volume in both display and cost-per-click advertising, as well as revenues associated with the acquisition of ConsumerSearch, Inc. ConsumerSearch, Inc., which was acquired in May 2007, is a leading online aggregator and publisher of consumer product reviews. Excluding acquisitions of ConsumerSearch, Inc. and UCompareHealthCare.com (in March 2007), revenues grew approximately 26%.

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