Earnings Call: NYTCo Exploring Dividend Cuts; Would Slashing Family Payout Cause Unrest?
This story was written by Staci D. Kramer.
The New York Times (NYSE: NYT) board of directors may cut the company's dividendand with it, payments of millions of dollars to members of the Ochs-Sulzberger families. The company has been criticized for paying substantial dividends but when asked what prompted the discussion, CFO Jim Follo played down possible catalysts: "This is a fairly dynamic discussion. This is a discussion that takes place every board meeting on how to allocate capital, what we see in the future as far as investment opportunities." During his prepared remarks, Follo said the company is reviewing its uses for cash, exploring finance alternatives and considering other measures. Follo said the dividend decision would be made "before the end of this year to determine what is prudent in light of the overall market conditions." Would the board cut the dividend in half or take it to zero? A non-answer answer. The current dividend is 23 cents a share with the family getting about $25 million.
The better question: Would a cut cause the Bancroft-Pulitzer kind of family unrest Arthur Sulzberger has been able to avoid until now and produce some breaking in the ranks by those who would rather get money through a sale if they aren't getting it through dividends? More to come.
By Staci D. Kramer