New York Times set to increase price
By Kenneth Li in London
Published: May 1 2009 22:45 | Last updated: May 1 2009 22:45
The New York Times is expected to announce a newsstand price increase for its flagship newspaper early next week as it races to shore up liquidity amid industry-wide falls in advertising revenues and circulation.
The announcement comes as the New York Times is pushing for cost cuts from the struggling Boston Globe, which the New York Times purchased in 1993 for $1.1bn.
The New York Times set the unions at the Globe a deadline, due to expire last night, to start talks about $20m in cuts. It has threatened to close the Globe, which is expected to lose $85m this year, if it were to fail to implement the cost cuts.
Wholesalers expect the New York Times to increase its price from $1.50 to $2.00 for Monday to Saturday editions and from $5 to $6 on Sundays. A spokeswoman declined to comment.
Recent sales figures suggest the price rises could generate an incremental $40m a year, according to one industry source, although price increases have dented circulation at some newspapers.
The New York Times has strengthened its balance sheet by taking a high interest loan from Mexican billionaire Carlos Slim, who was the subject of a glowing tribute in the latest edition of Time magazine by Arthur Sulzberger Jr, the New York Times’ chairman and publisher.
The latest test of newspapers’ pricing power comes after steep falls in circulation for the leading US news titles during the six-months to March. The New York Times’ weekday circulation fell 3.6 per cent, beating a sector-wide 7.1 per cent slump, according to the Audit Bureau of Circulations. It was not clear if price increases would be implemented for subscribers.
The New York Times raised the cover price of its Monday to Saturday editions by 25 cents to $1.50 last year, and its strategy reflects similar moves by other newspapers, including the Wall Street Journal, owned by News Corp, and the Financial Times, owned by Pearson. The Wall Street Journal raised the cover price by 50 cents in each of the last two years and now costs $2 per copy. The Financial Times implemented 50 cent increases in US cover prices in 2005, 2007 and 2008, and now costs $2.50.
Circulation revenue has been one of the few bright spots in the New York Times’ financials. Circulation revenue rose 1 per cent in the first quarter to $229m, led by a 3 per cent increase at the troubled New England Media Group, which houses the Globe.
The Globe raised its weekday cover price to 75 cents from 50 cents and is expected to rise to $1 within the city and $1.50 outside Greater Boston. The Sunday Globe will rise to $3.50 in the city and $4 elsewhere.
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