Incorporated: 1851 as Raymond, Jones & Company
NAIC: 511110 Publishers, Newspaper, Combined with Printing; 516110 Internet Publishing and Broadcasting; 519110 News Syndicates; 513112 Radio Broadcasting Stations; 513120 Television Broadcasting Stations
The New York Times Company (NYTC) is a diversified media company including newspapers, magazines, television and radio stations, electronic information services, and electronic publishing. The company publishes three major daily newspapers, the New York Times (the Times), the International Herald Tribune, and the Boston Globe, and 16 regional newspapers. The company operates eight network-affiliated television stations and two New York City radio stations. The Times Syndicate sells columns, magazine and book excerpts, and feature packages to more than 2,000 newspapers and other media to clients in more than 50 countries. It is the largest syndicate in the world specializing in text, photos, graphics, and other noncartoon features. As part of an aggressive expansion campaign the New York Times increased its U.S. distribution from 62 markets in 1997 to 235 in 2002.
The principal founders of the New York Times were Henry Jarvis Raymond, a sometime politician, reporter, and editor who learned his trade working for Horace Greeley on the New York Tribune, and George Jones, an Albany, New York, banker who had also once worked for Greeley as a business manager on the Tribune. Raymond proposed a newspaper that would present the news in a conservative and objective fashion, in contrast to the yellow journalism of the day, which emphasized crime, scandal, and radical politics. They raised $70,000 to establish Raymond, Jones & Company, in large part by selling stock to wealthy upstate New York investors, and set up their editorial offices in a dilapidated six-story brownstone on Nassau Street in downtown New York City. The first issue of the New York Daily Times (the word "Daily" was dropped from the title in 1857) was dated September 18, 1851, and it announced an editorial policy that would emphasize accurate reporting and moderation of opinion and expression.
Jones handled the company's business affairs, and Raymond, as editor, provided journalistic leadership. Under their management, helped by booming population growth in New York City, the Times grew rapidly, reaching 10,000 circulation within ten days and 24,000 by the end of its first year. In 1858 the paper moved into a new five-story building containing the most modern printing equipment. As the Times prospered, Raymond established and continually encouraged the high standards of journalism that prevail to this day. It also became a newspaper of record. For example, it carried the entire text of Lincoln's "Gettysburg Address" on the front page on November 20, 1863. Among other journalistic successes, the Times provided outstanding coverage of the U.S. Civil War, with Raymond himself reporting on the Battle of Bull Run.
Raymond was active in Republican politics throughout the war. He was present at the creation of the party in Pittsburgh in 1856 and wrote its first statement of principles. He wrote most of the party platform in 1864. Between political activity and journalism, Raymond was chronically overworked for years, and his health suffered. On June 19, 1869, at the age of 49, he died. George Jones assumed the editorial leadership of the Times.
By the time of Raymond's death, each of the 100 shares of stock in the company had increased in value from the original $1,000 to about $11,000, with 34 shares held by Raymond and 30 by Jones. In 1871, after a series of Times articles on the misdeeds of corrupt New York City politicians headed by William Marcy (Boss) Tweed, an attempt was made by Tweed interests to buy Raymond's 34 shares from his widow. Jones quickly arranged to have the shares purchased by one of his associates, thus establishing his control of the newspaper. In 1884 Jones chose to oppose the nomination by the Republican party of James G. Blaine for president, thus losing the much needed support of Republican readers and advertisers. The paper's profits fell steadily until Jones's death in 1891. His heirs had little aptitude for the newspaper business, and the panic and depression of 1893 brought the Times close to failure.
In 1893 the Times's editor-in-chief, Charles Ransom Miller, bought control of the paper from Jones's heirs with $1 million raised from Wall Street interests. Miller, a fine editor, had no business aptitude and was unable to maintain the newspaper's capital requirements. Staff reductions and declining journalistic quality brought the Times to its historic low point, and by 1896 it was on the verge of bankruptcy and dissolution. During this critical year salvation came in a dramatic fashion. A group of Wall Street investors in what was then called the New York Times Publishing Company arranged to save the firm--and their investments--by placing it in receivership and recapitalizing it as a new company, The New York Times Company. The new capitalization was 10,000 shares with 2,000 being paid out in exchange for the original Times stock. A large stock position with contractual assurance of eventual majority stock ownership was purchased with borrowed money by a then little known but respected newspaper editor and publisher from Chattanooga, Tennessee, Adolph Simon Ochs.
Ochs, the son of German immigrants, had received little formal schooling, but had learned the newspaper business from the ground up as newsboy, printer's devil, journeyman printer, business manager, and reporter. He was hard-working and ambitious. In 1878, at the age of 20, he borrowed $250 to buy the controlling interest in a failing Tennessee newspaper, the Chattanooga Times, thus beginning his career as a newspaper publisher before he was old enough to vote. He promoted high standards of journalism in the Chattanooga paper and soon brought it back to financial health. In 1896, looking for new challenges, he heard about the New York Times's troubles. Ochs offered to take over as publisher in return for a contract that would give him a majority of the paper's stock if he succeeded in making it profitable for three consecutive years. One of his early acts after becoming publisher of the Times on August 18, 1896, was to add the slogan, "All the News That's Fit To Print," thus serving notice that the Times would continue to avoid sensationalism and follow high editorial standards.
Ochs's first two years with the Times were a continual struggle to carry on operations and improve the paper with inadequate capital. The expenses of covering the Spanish-American War in 1898 came close to ruining the paper, which sold then for three cents a copy. Some Times executives advised raising the price, but Ochs made the brilliant and daring decision to reduce the price to one cent. Within a year paid circulation trebled from 26,000 to 76,000. Advertising linage increased by nearly 40 percent, and the paper was profitable. Despite subsequent price increases, this was the beginning of a long upward trend in circulation and profitability. On August 14, 1900, Ochs received the NYTC stock certificates that established his control over the paper and the company, a controlling interest that was still held by his descendants in 1991.
The Times's success under Ochs was due to much more than price-cutting. He improved financial and Wall Street coverage, added a Sunday magazine supplement, and a Saturday book review section, which was later moved to Sunday. With a brilliant managing editor, Carr Van Anda, the Times carried out numerous journalistic coups. It scooped the world on the Japanese-Russian naval battle in 1904 by sending the first wireless dispatches from a war area. It again scooped the world on the Titanic shipwreck in 1912 and outdid all competition in reporting the events of World War I. The paper warned of the excesses of the 1920s, but was well equipped financially to survive the Great Depression thanks to Ochs's conservative policy of plowing back into the paper a major portion of its profits.
Under Ochs, the NYTC followed a general policy of avoiding diversification, although Ochs himself continued as the personal owner and publisher of the Chattanooga Times and had a private investment in a Philadelphia paper between 1901 and 1913. In 1926, however, the NYTC did take part ownership, along with Kimberly & Clark Company, in a Canadian paper mill, the Spruce Falls Power and Paper Company, to assure its supplies of newsprint.
The Times did relatively well during the Great Depression, with daily circulation holding in the 450,000 to 500,000 range. Ochs's health declined during the early 1930s, and he died on April 8, 1935. On May 7, 1935, the company's directors elected as president and publisher Ochs's son-in-law, Arthur Hays Sulzberger, who had married Ochs's daughter Iphigene in 1917 and subsequently worked his way up through the executive ranks of the newspaper.
Under Sulzberger the Times improved steadily in news coverage, financial strength, and technical progress. In a diversification move in 1944 the NYTC purchased New York City radio stations WQXR and WQXR-FM. Sulzberger opposed without success the unionization of Times employees. The company's first published financial statement in 1958 showed 60 consecutive years of increasing profits. In 1957 a recapitalization split the common stock into A and B common stock, with the B shares, mostly held by the Ochs trust, having voting control over the company. Sulzberger's health began to fail in the late 1950s. He retired in 1961. His successor as president and publisher was his son-in-law, Orvil E. Dryfoos. Dryfoos died in 1963. On June 20, 1963, he was succeeded in turn as president and publisher by Arthur Hays Sulzberger's son, Arthur Ochs Sulzberger, who continued in 1991 to lead the NYTC as chairman and chief executive officer.
Although Sulzberger made some administrative changes and broadened the scope of the Times news coverage, the company continued to earn a relatively low profit margin on revenues, partly because of his policy of spending freely for thorough reporting, even to the extent of throwing out advertisements to make room for news. A second bitter strike against the paper in 1965 unsettled the management, and a decision was made to undertake a significant program of diversification. In 1967 the company's book and educational division was enlarged, and in 1968 the Times purchased a 51 percent interest in Arno Press. In 1969 the A common stock was given the vote for three members of the nine-member board. This action together with a public offering qualified the A stock for listing on the American Stock Exchange. The B stock, which controlled the company, continued to be held mostly by the Ochs family trust. In 1971 the NYTC paid Cowles Communications Company 2.6 million shares of class A stock to purchase substantial newspaper, magazine, television, and book properties, including Family Circle and other magazines; a Florida newspaper chain; a Memphis, Tennessee, TV station; and a textbook publisher.
During the 1970s the newspaper's profit margins continued to be under pressure because of competition, especially in New York City suburban areas. The former Cowles properties helped buoy earnings despite the 1976 sale of some medical magazines acquired from Cowles. In 1980 the NYTC paid about $100 million for a southern New Jersey cable television operation, its largest acquisition since the Cowles deal. In 1984 the book publishing operation was sold to Random House, but in 1985 the NYTC, flush with record profits, spent about $400 million on the purchase of five regional newspapers and two TV stations. In 1986 yet another recapitalization converted every ten shares of B stock into nine shares of A and one share of B, with the B stock still controlling the company. Since more than 80 percent of the B stock was held by the Ochs trust, this move gave the trustees more liquidity without sacrificing control of the company. The years 1989 and 1990 continued to be profitable. In 1989 the NYTC, admitting it was not making progress with cable, sold all of its cable TV properties to a consortium of Pennsylvania cable companies for $420 million. Also in 1989 the company acquired McCall's magazine, which, together with the acquisitions in 1988 of Golf World and Sailing World, substantially strengthened the NYTC's magazine group. The company's large new automated printing and distribution facility in Edison, New Jersey, which had been under construction for several years, was scheduled to become operational in late 1990.
Throughout the 1990s, the company would buy and sell properties in the areas of print, cable broadcasting, and electronic media because the decline in newspaper readership in the United States was continuing. In 1993, NYTC bought Affiliated Publications, which owned the Boston Globe and specialty magazines published by its division, BPI Communications. In 1994, the company sold its one-third interest in BPI, along with a group of women's magazines, including Family Circle and McCall's, to Germany's Bertelsmann AG. Also in 1994, NYTC began construction on a state-of-the-art printing plant that would allow adding more color to newspapers and allow for later deadlines.
In 1995, the purchase of a majority interest in Video News International, a video newsgathering company, was made. A return to cable was made when the company bought a minority stake in the cable arts network Ovation and launched two cable news channels in Arkansas. Also in 1995, the company entered cyberspace in two ways. One was by joining with eight other newspaper companies in an online news service, New Century Network. The other was creating The New York Times Electronic Media Company as a wholly owned subsidiary that would develop new products and distribution channels for the Times, such as on the Web, America Online (AOL), and The New York Times Index.
Two years later, in 1997, a new, expanded version of the AOL site debuted with a new design, improved navigation and functionality, new content areas, and expanded advertising opportunities, such as allowing advertisers to target ads to readers of particular sections. The new content, available only to AOL members who made the Times site one of the service's most popular since its debut in 1994, included People in the News area, enhancements to Science Times, live crosswords and news chats, a weekly news quiz, a Topic of the Day message board for discussions based on Page One articles, monthly Times retrospectives, free access to Times crossword puzzles and the bridge and chess columns, a themed monthly crossword puzzle, and The New York Times Magazine.
The New York Times Syndicate launched a weekly column written by the Duchess of York in 1997. The Duchess, who was the former Sarah Ferguson and former wife of Prince Andrew, the second son of Great Britain's Queen Elizabeth, wrote about current events and social issues that interested her.
The New York Times Company had come a long way from the small brownstone on Nassau Street where Henry Raymond published the first issue of the New York Times in 1851. Company success resulted not only from strong business leadership during much of its history but also from a series of capable publishers, editors, and reporters who built and continued to operate one of the world's great newspapers, in print and online.
In 1997, the New York Times Company embarked on an ambitious program of expansion focused on transforming its flagship product, the New York Times newspaper, from a regional to a national publication. Integral to the goal of building widespread brand recognition was a new, $20 million advertising campaign featuring the slogan, "Expect the World." That year, the newspaper also implemented the most extensive changes to its operations and format since the 1970s. With more advanced production equipment, the paper was able to included later-breaking news and sports scores, as well as new sections and features. On October 16, the paper introduced color printing to its front page.
Further, as 1997 marked the culmination of a ten-year, $1 billion program of capital investments to shore up the paper's strengths, its print facilities, and its customer base, the company enjoyed a dramatic increase in cash flow, which it began to allocate toward two long-term goals, both aimed at increasing shareholder value. First, the company launched an aggressive share repurchasing initiative--starting with three million shares valued at $145.6 million that year, the initiative grew every year with the company allocating $623.7 million for the repurchase of 15 million shares in 2001--in order to improve its overall leverage and increase stock dividends. Second, the company sought strategic acquisitions to expand its portfolio of products and services, enter new markets, and facilitate distribution by opening new print sites around the country.
The company continued to flourish. Among other efforts to increase the appeal of its nationally distributed newspaper, the New York Times added new features such as Circuits, a weekly technology section introduced in 1998, which was soon generating about $1 million per month in advertising revenue. In 1999, with the economic boom of the 1990s still holding, the company enjoyed earnings per share growth of 20.5 percent, its fifth consecutive year of double-digit growth. Moreover, revenues for 1999 reached an unprecedented $3.1 billion, while total costs increases were comparatively modest. Indeed, even while the company focused on expansion, it continued to keep a firm grasp on its expenses, and to hone its focus on core businesses. In 1997 the Magazine Group sold off six of its smaller, low-margin publications in order to channel more resources into its high-margin golf publications, especially the award-winning Golf World. Although the golf magazines remained popular and profitable, they contributed only about 3 percent to the company's overall revenue, and by 2000 the company moved to sell off its Magazine Group entirely to Advance Publications, Inc.
To keep pace with the growing Internet economy, in 1999 the company established New York Times Digital, an independent business unit, to oversee the operations of NYTimes.com, then boasting more than ten million registered users. The company adopted what it called a "click and brick" business model, by which it sought to establish synergies between its traditional print media and its electronic offerings, as well as to maximize the revenue potential of the Internet. To this end, in 1999 the NYTC invested $15 million in TheStreet.com, one of the top Internet providers of financial information and investment news and commentary, a digital publication with whom the Times shared a key customer base. The New York Times Digital unit reached profitability in 2002.
The year 2001 proved turbulent for the NYTC, as the dot-com bubble burst, the economic slowdown bloomed into a full recession, and as New York City weathered the terrorist attacks of September 11. Still, the company managed to perform well in the midst of chaos, with earnings per share growth of 8 percent in a year when the S&P 500 dropped by 13 percent, and an impressive six Pulitzer prizes to show for the New York Times's coverage of 9/11. Staying the course with its national expansion program, the company had increased its distribution from 62 markets in 1997 to 235 in 2002. Even as the national program enjoyed overwhelming success, the company also continued to invest in its regional media properties, especially through its ownership of the Boston Globe, and to lay the groundwork for penetration of international markets through the introduction of branded pages into respected foreign newspapers such as France's Le Monde.
The New York Times newspaper was beset by an internal crisis in the spring of 2003 when news emerged that one of its reporters had written numerous fraudulent and even plagiarized stories that had gone undetected by his supervisors. The scandal resulted in the resignation of two of the paper's top editors, Howell Raines and Gerald M. Boyd, and a serious blemish on the record of the otherwise revered paper. Despite this unfortunate episode, however, most agreed that the paper's image would soon be restored. Overall the New York Times Company appeared exceptionally well-positioned for continued success into the first decade of the 21st century.
Principal Subsidiaries
NYT Capital, Inc.; NYT Holdings Inc.; The New York Times Syndication Sales Corporation; The New York Times Distribution Corporation; The New York Times Electronic Media Company; The New York Times Sales Company; The New York Times Syndication Sales Corporation.
Principal Competitors
Dow Jones & Company, Inc.; Gannett Co., Inc.; The News Corporation Limited.
Further Reading
Berger, Meyer, The Story of the New York Times, 1851-1951, New York: Simon and Schuster, 1951.
Goulden, Joseph C., Fit to Print, Secaucus, N.J.: Lyle Stuart Inc., 1988.
"Keeping the Gray Lady Spry: CEO Russell Lewis Explains How Constant Investment, Even in Bad Times, Ensures New York Times Co.'s Long-Term Health," Business Week Online, November 8, 2002.
Salisbury, Harrison E., Without Fear or Favor, New York: Times Books, 1980.
Steinberg, Jacques, "Changes at the Times: The Overview," New York Times, June 6, 2003, p. 1.
Talese, Gay, The Kingdom and the Power, New York: World Publishing Company, 1969.
White, Christina, "A French Beau for the New York Times: The Paper's New English-Language Supplement in Le Monde Could Be a Long-Sought Short-Cut into Europe's Mainstream Readership," Business Week Online, April 12, 2002.
Wyatt, Edward, "New York Times to Invest $15 Million in TheStreet.com," New York Times, February 23, 1999, p. C8.
— Bernard A. Block
