Markets

NYT Debt Downgraded to Junk as Ad Revenues Fall

By David Weir

Updated on: October 24, 2008 / 6:06 PM EDT / MoneyWatch

First, the good news, since there's plenty of bad to follow.

The New York Times announced it has launched a new video platform on its website, which provides:

A widescreen (16x9) format for high-definition videos;
A redesigned video library offering "a clean layout and a black background for optimal viewing comfort;"
Individual video pages -- an individual playback page for each video that provides a better viewing experience and enhanced search ability;
A continually updated "Most Viewed" list of the most popular videos across the site; and
Tools for sharing videos to social sites such as Digg, Facebook, LinkedIn, Mixx and Yahoo! Buzz.

All of this is good stuff, of course, but nobody in the markets seemed to be listening. The company's stock, which as recently as last spring was trading in the low $20s, tumbled down 10.75 percent to close in single-digit territory, at $9.55. The company's debt was downgraded to "below investment grade" -- or "junk" status -- by Standard & Poor's.

Although its online revenues continue to grow, the dramatic loss of advertising revenue on the print side is causing this ship to sink. Pretty soon, they may have to rename it The New York Titanic.

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In other news, the Associated Press has suspended its rate hikes pending further study. As we've reported here, struggling newspapers around the U.S. have been canceling their A.P. subscriptions lately, saying it is a luxury they can no longer afford. With demand falling, supply had to adjust, thus the reversal of the rate hike.

Don't expect A.P. to reinstate its higher rate schedule anytime soon. That dog didn't hunt.