New York Times Co (NYT) 2008 Q4 法說會逐字稿

Good day and welcome to The New York Times fourth quarter 2008 earnings conference call.

Today's call is being recorded.

A question-and-answer session will follow today's presentation.

(Operator Instructions)

For opening remarks and introductions I would like to turn the call over to your host, Ms.

Catherine Mathis.

Please go ahead, ma'am.

Thank you and welcome to our fourth-quarter and year-end earnings conference call.

We have several members of our senior management team here today to discuss our results with you.

They include Janet Robinson, our President and CEO; Jim Follo, our Senior Vice President and Chief Financial Officer; Martin Nisenholtz, Senior Vice President, Digital Operations; Denise Warren, Senior Vice President and Chief Advertising Officer for the New York Times Media Group, and General Manager of NYTimes.com; and Roland Caputo, who is our Senior Vice President and Chief Financial Officer of The New York Times Media Group.

All comparisons on this conference call will be for the fourth quarter of 2008 to the fourth quarter 2007 unless otherwise stated.

Our discussions will include forward-looking statements and our actual results may differ from those predicted.

Some of the factors that may cause them to differ are included in our 2007 10-K and our third quarter 2008 10-Q.

Our presentation will also include non-GAAP financial measures and we have provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our corporate website at www.NYTCo.com.

An archive of this call will be available on our website, as will a transcript and a version that's downloadable to a MP3 player.

With that let me turn the call over to Janet Robinson.

Thank you, Catherine, and good morning, everyone.

The disruptions of the global economy are affecting all businesses and industries, especially companies such as ours that generate a significant portion of their revenues from advertising.

In this time of unprecedented change we are responding strategically and creatively to manage our businesses and prepare for our future, while preserving the flexibility to navigate this difficult period.

You have seen that in our decision to restructure our cost base, to preserve capital by reducing our dividend, and to improve our financial position by completing the transaction announced last week.

And you see that daily in how we are responding to the present realities of our market.

For the fourth quarter we reported earnings per share from continuing operations of $0.19, which included $0.10 for severance costs and $0.07 for the write-down of an intangible asset at the International Herald Tribune, compared with $0.37 earnings per share in the fourth quarter of 2007, which included $0.07 per share for severance costs and $0.07 for asset write-downs of the Worcester Telegram & Gazette and Metro Boston.

In the fourth quarter we saw a weakening of revenues, as the economy declined and advertisers pulled back on placements.

Digital revenues decreased in the quarter as online marketers reduced display ads in response to deteriorating business conditions.

As we look back on the quarter we believe it is important to highlight several items.

First, the United States presidential election and the turmoil in the world's financial markets have again demonstrated the need for the high-quality journalism we provide in print and online.

The continued strength of our brands was evident in the willingness of our readers to pay higher prices for our newspapers, which in turn is reflected in the growth of our circulation revenues.

Second, our focus and discipline on reducing costs is shown clearly in our results.

In the fourth quarter, our operating costs decreased 8.5% and this occurred despite a 33% increase in newsstand prices.

We plan to continue to drive down costs without detracting from the quality of our journalism or our ability to achieve our strategic objectives.

Third, we have taken steps to provide our Company with increased financial flexibility to continue to execute on our long-term strategy.

Last week we announced a private financing transaction for $250 million in senior unsecured notes and warrants.

The proceeds from this transaction will be used to refinance existing debt, including amounts currently borrowed under a revolving credit facility that matures in May of 2009.

We continue to explore other financing initiatives and are focused on reducing our total debt.

We plan to do so through the cash we generate from our businesses and the decisive steps we have taken to reduce costs, lower capital spending, decrease our dividend, and rebalance our portfolio of assets.

One recent example is that we are exploring the possible sale of our 17.75% stake in New England Sports Ventures, whose holdings include the Boston Red Sox, Fenway Park, and approximately 80% of New England Sports Network, a regional cable sports network.

Jim will discuss all these steps in greater detail.

Turning now to revenues in the quarter, total revenues for the Company declined 10.8%, with ad revenues down 17.6%, circulation revenues up 3.7%, and other revenues down 2.5%.

At the News Media Group which includes the New York Times, New England and Regional Media Groups, ad revenues decreased 18.4%, with national advertising down 14.9%, retail down 15% and classified down 32.9%.

At The Times Media Group ad revenues decreased 16.9% in the quarter.

National print categories that performed well included Corporate advertising, which saw significant gains from energy-related companies; financial services, where mutual funds, banks and insurance companies ran reassuring ads amidst the crisis in the financial market; and advocacy, which was helped by the election, economic woes, and environmental issues.

The national print category is where we saw the largest declines were Entertainment, where studios release fewer films than the prior year and limited support for new releases; telecommunications, where advertisers are making placements less often as the industry matures; and books, as retail booksellers saw lower sales and publishers delayed new releases.

Classified advertising declined in all three major categories -- real estate, recruitment and automotive.

Retail advertising revenues were down due to decreased advertising from department stores, mass market and home furnishing stores.

At the New England Media Group advertising revenues declined 21.3%.

National ad revenues decreased in the fourth quarter, with the largest declines in the entertainment, non-bank financial services and telecommunications categories.

Retail advertising revenues declined due to weakness in department store, home furnishing and jewelry advertising.

Bank and utility advertising increased in the quarter.

Overall, classified advertising at the New England Media Group was soft in all three major areas; recruitment, real estate and automotive.

At the Regional Media Group advertising revenues decreased 20.9%.

Almost 60% of the decline was due to less classified advertising.

Total circurup -- circulation revenues were up 3.7% in the quarter because of higher prices at the Times, New England, and the Regional Media Group.

At the Times the election resulted in higher newsstand sales on November 5th and had a carryover effect that has been reflected in new home delivery subscriptions.

Other revenues for the News Media Group decrease 2.9%, mainly as a result of less direct mail and commercial printing.

Throughout 2009 the other revenue comparisons will be negatively affected by the closure of City & Suburban, our retail and newsstand distribution organization in the New York metropolitan area, which occurred earlier this month.

In the quarter, digital ad revenues at the News Media Group declined 3.2%.

In November and December, as the economy slowed, we saw significant industry-wide pull back in online display advertising.

For the year our online ad revenues at the News Media Group grew 8.7%, with NYtimes.com significantly outpacing the industry in the growth of its display advertising.

At the About Group total revenues decreased 2.9% to $29.8 million, as display advertising softened.

Cost-per-click advertising rose in the mid single digits.

During the quarter the Group relaunched consumersearch.com with a complete redesign that will further help value-conscious shoppers by making it easier to access the reviews and analysis the site has amassed on a wide range of products and services.

In total, internet businesses accounted for 12% of the Company's revenues in the fourth quarter versus 11% in the 2007 fourth quarter.

In the fourth quarter we sold 2.3 million of the Times' November 5th issue and related election items.

Across all our newspapers and websites the inauguration provided us with revenue opportunities in both advertising and circulation.

Advertisers responded well to our special print and online inaugural section.

We significantly increased the number of copies of the January 21st issue we printed for newsstand distribution for both the Times and the Globe.

Based on conversations we have had with media buyers we believe advertisers will be cautious with their budgets, particularly in the early part of the year.

To date in January the rate of decline in print advertising has accelerated from what we saw in December, while that of digital is similar to last month.

During this difficult time in our business and the economy how well we execute on our strategy is more important than ever.

Providing high quality journalism, developing new revenue streams, restructuring our cost base, and improving our financial flexibility will help us meet the challenges we face, and we are doing all of these.

As our newspaper -- as other newspapers cut back on international and national coverage or cease operation, we believe there will be opportunities for the Times to fill this void.

Earlier this month we introduced front-page ads at The New York Times and The Globe, which generate incremental revenue for our papers.

On the cost side we will continue on the path we have been on for some time of streamlining our businesses and lowering costs so that we are operating as efficiently and effectively as we can.

Now, let me turn the call over to Jim, who will tell you more about our cost reduction initiatives and the steps we are taking to enhance our financial flexibility.

Thank you, Janet.

We continued to tightly manage our expenses in the fourth quarter.

As Janet said, operating costs declined 8.5%, mainly as a result a lower compensation costs and benefit expense.

For the year operating costs dropped 4.7%, or approximately $136 million.

Severance costs were $0.10 per share on the quarter, or $24 million.

Of this amount, approximately $20 million was for the shutdown of C&S.

In the fourth quarter of 2007 the Company had $0.07 per share, or $17.8 million in severance costs.

For 2008 severance costs totaled $8.81 million compared to $35.4 million in 2007.

At year-end 2008 our headcount was down 9% from the prior year.

Depreciation and amortization decreased 23% to $36 million from $46.7 million in the fourth quarter of 2007, primarily because of various assets at The New York Times Media Group reached the end of their depreciation periods in the first nine months of 2008.

Newsprint expense rose 11%, stemming from a 33% increase in prices offset in part by a 22% decrease in consumption.

The newsprint price increase added $18 million to costs in the fourth quarter, and the decrease in consumption lowered costs by $12.1 million.

Newsprint transaction prices peaked in November and have been trending down.

Forecasters believe that prices will decrease in 2009, as the decline in newsprint demand continues.

In 2008 we reduced the width of six of our regional newspapers to 44 inches, which will benefit us this year.

The progress we have made on our cost reduction measures continues across the Company.

The closure of C&S is expected to improve our operating results by $27 million on an annual basis.

This is the result of an estimated decrease in costs of approximately $112 million to operate C&S, offset in part by an estimated decrease in other revenues and circulation revenues of $85 million.

In the first quarter we expect to record a $14 million charge for above market leases at C&S.

The combination of industry trends and economic forces led us to carefully evaluate our retirement and healthcare plans.

We believe it is important to strengthen the Company's financial health by trimming current benefit expense and reducing future liabilities while providing benefits that are attractive to existing and new employees.

As a result, effective this month we decreased the formula for pension benefits for nonunion employees and amended our retiree medical plan.

We expect these changes to result in net savings of $18 million in 2009, and to reduce our benefit obligation by approximately $70 million and post-retirement benefit obligation by approximately $20 million.

Due to significant declines in the equity markets in 2008, the funded status of the Company's qualified pension plans has been adversely affected.

At the end of 2008, the Company's unfunded pension obligation is estimated to be approximately $625 million.

Assuming the equity markets do not sufficiently recover, the discount rate does not increase, and there is no further legislative relief the Company will be required to fund this deficiency over a seven-year period.

We expect no contributions will be required in 2009 because of our pension funding credits.

The Company will also continue to assess whether to make discretionary contributions after considering the funded status of its plans, movements in the discount rate, investment performance and other factors.

In September we announced the consolidation of two of the Globe's printing facilities, which we expect to complete in the second half of this year.

In December we negotiated improved contracts with the pressmen and drivers in New England.

The combination of these two items is expected to result in about $20 million in annual savings.

At our Regional Media Group we have consolidated our outsourced telemarketing and some finance functions and advertising functions.

Furthermore, our general administrative costs continue to be reduced through offshoring, centralizing and other means.

We are taking decisive steps to reduce capitol spending and improve our liquidity.

In 2009 we expect our capital expenditures will decrease from the 2008 level of approximately $127 million to approximately $80 million, despite investments totaling $27 million for the plant consolidation and a systems project.

In November our board of directors reduced our fourth-quarter dividend by almost 75% to $0.06 per share from $0.23 per share.

This is a difficult but necessary decision that we believe will provide us with greater financial flexibility in these uncertain economic times.

As Janet mentioned, the $250 million transaction that we announced last week addresses our financing needs in 2009, including the credit agreement that expires in May and the $100 million in bonds that are due in November of this year.

The Company will record the debt in the amount of $221 million.

The $29 million difference between the cash received of $250 million and the recorded amount of $221 million is the fair value of the warrants of approximately $21 million, and $8 million of fees paid.

The $21 million in warrants were recorded in shareholders's equity.

The $29 million will be amortized into interest expense over the six-year term of the notes.

We continue to actively explore a sale/leaseback for up to $225 million for part of the space we own in our New York headquarters building.

We expect proceeds from this transaction will be used to refinance existing long-term debt.

We also continue to evaluate our assets.

As Janet said, today we announced that we are exploring a possible sale of our interest in the New England Sports Ventures, which includes ownership of the Boston Red Sox, and as always we continue to evaluate our assets to determine if they remain a strategic fit, and given the outlook for the business and their financial performance makes sense to continue to be part of the Company.

Beginning this month we will no longer be issuing monthly revenue releases.

We will, however, include in our quarterly earnings releases a breakdown of revenues for national, retail, classified and other categories.

For some time our industry has been moving away from providing monthly revenue releases and we believe this is consistent with our focus on managing our business for the long term.

And with that we'd now be happy to open up for questions.

(Operator Instructions) We take our first question from Edward Atorino with Benchmark.

Please go ahead, sir.

You caught me off-guard there.

Three questions.

On the sale of the distribution operation did you say that -- so the other line from that business will go down $80 million on the other line basis, is that right, number one?

Number two, you got a $20 million savings at the Globe and an $18 million savings someplace else, are there any other items?

Or to put it another way, what would be the '09 savings?

And thirdly, would you project your interest expense for '09 given the new financing, does it only go up to $29 million over six years?

I would assume it would go up more than that given the financing.

Ed, let me just start with the financing and I'll work backwards.

Thank you.

It's difficult to give precise guidance on interest expense for 2009 --

Ballpark's fine.

-- as we are in the midst of -- as we said of negotiating a sale/leaseback or potentially other financing.

Let's just do what's slims money.

The slim money, as you know, is 14% and then the discount on the notes being amortized over six years, you can do the math and just apply that over six years and I think that will add a couple -- a few points to the underlying interest rate of 14%.

So you charge interest costs of 14% -- the 11% plus the 3% you charged at Interest expense?

That's correct, yes.

Essentially there's a discount on our balance sheet against the notes that will essentially amortize into interest expense.

Right.

And you amortize these fee that -- the fees over the six years?

That is correct.

Okay.

As far as the New England Media Group, the plant consolidation refer to an annual run rate of $20 million and we get about half of that this year, because it's the second half of the year.

The other issue you talked about was the revenues that we will be losing from the C&S shutdown; about $10 million of that will go against circulation revenues and the remainder will go against other revenues.

So the remainder is, what, $70 million?

It's about $70 million.

$75 million I think it -- I think that math is $10 million on single copy and about $75 million on other revenues.

And that was not profitable?

Well, as we said our profitability will improve by $27 million by exiting that business, so it was unprofitable.

[Okey-dok]

Next item?

And we will take our next question from Catriona Fallon with Citi.

Please go ahead.

Hi, this actually David Rose for Catriona.

Jim, with regards to the pension underfunding is it that important as to figure out what the difference is between the funded and the -- sorry, not the funded but the qualified and the nonqualified plans as to how the underfunding is split up?

The number I referred to is the qualified plan only.

The unqualified plan as of last year, which is not funded, was about $227 million.

That is not impacted by changes in the stock market.

Okay, so the qualified plan dropped from a deficit of $48 million to $625 million in 2008 then?

That's correct.

How do the mechanics work in terms of funding that?

Is it straight line over seven years or is there a different type of formula that determines how much you have to pay into it each year?

Well, first of all let me just step back.

That's a point-in-time number --

I agree, yes.

-- and a lot of things will happen between now and when we actually start funding, but what certainly we know is that there is no contribution that needs to be made in 2009.

So if nothing were to change today, that $625 million gets condensed over a six-year period, but the funding calculations are very complex and quite frankly, I would be surprised if there wasn't some government intervention because I don't think this is a unique issue.

I think is a fair -- you'll see this as a fairly common issue.

I would be surprised if there wasn't some changes in those rules but you can't count on that.

But I think just broadly speaking I think you'll be thinking about that number over a six-year period.

But it's not exactly a straight line if it -- whatever the number ends up being it's not a straight line?

Not necessarily a straight line, no.

Okay.

And then with regards to the C&S shutdown I think you had originally discussed that most of the severance and lease write-offs were going to occur in Q4 and some of it was going to slip into Q1.

With $14 million lease charge you talked about today, is that the remainder of the write-offs for C&S or is there additional severance in Q1, as well?

There's little if no severance in Q1.

There might be some very, very small numbers but beyond that, I think $14 million pretty well covers it and that, by the way, is a non-cash charge, that will not be a cash charge.

Okay.

And then the last question -- maybe this is to Martin or to Janet, as well -- About.com's growth, or I guess decline in advertising this quarter, slipped below that of the newspaper online websites.

I'm just wondering if -- what sort of pattern you see in terms of advertisers choosing About or choosing the newspaper sites in 2009 and what sort of trajectory do you see for those two separate items this year?

This is Martin.

As Janet said in her introduction, the issue at About in the fourth quarter was really a deepening of an issue that we had been seeing all year, which was the softness in display advertising.

And as I think I said on other calls, the strength of the NYTimes.com business is in its display line.

It is able to get premium rates based on its brand and its audience.

About has a harder problem doing that.

About's business is strengthened by its cost per clip line, so to the extent the display business goes softer it can dip below the Times because the Times, obviously, has great strength on the display side relatively speaking.

With respect to going forward, the -- I think the idea is that we will be looking at the design of the site, optimizing it more going forward for CPC, which at about -- as again Janet said, remained relatively strong in the mid single digits in the fourth quarter.

That was obviously a decline off of the rest of the year, but as you saw in Google's numbers, the same thing happened in the fourth quarter.

The site will be more optimized going forward this year for CPC as that business is still growing.

So that should basically answer your questions.

Okay, thank you.

And we take our next question from John Janedis with Wachovia.

Please go ahead.

Hi, thank you.

Good morning.

Janet, obviously pressure on the retailers is growing and with the Circuit City bankruptcy I'm wondering if you created some sort of watch list or something of advertisers that you think have closed down and maybe what percentage of you revenue they might represent?

And then also, if you're seeing a trend where customers are either asking for a change in terms for payment or just not paying their bills?

Thanks.

We are watching it very carefully.

I think that it's clear that the retail industry is going through some very difficult times.

Circuit City did advertise in The Times, the Globe and the regionals but the impact is minimal.

In regard to terms of payment we are working with all of our advertisers and there certainly is concern in regard to some of their practices, but I think from a standpoint of monitoring this very carefully, John, we continue to do so as we always have and continue to watch the list very carefully in regards to that may be most vulnerable.

The way that you characterize it, is about 25% of your revenue retail?

Hold on one minute.

It's 13% at The Times, 33% at the Globe, 56% at the Regional for a total of 24%.

From an industry perspective it runs around 50% industry wide, so we are a little less vulnerable on the retail side.

That has a great deal to do, needless to say, with the strength of national advertising percentage at the -- or the larger percentage, I should say, at The Times and the Globe.

Okay, thanks, Janet.

And then one quickie for Martin.

Can you talk a bit about what you're seeing, maybe a deeper dive on the display side of the business.

There's been obviously a lot of talk about CPM pressure, and I'm wondering if you can maybe give us some more color about price versus inventory sold?

Sure, and I'll -- Denise Warren is here from the Times Media Group, so I'll let her comment as well.

Again, as I've been saying all year one of the themes this year has been a two-fold theme.

The notion that we're seeing or we have seen an increasing amount of inventory on the marketplace and we've seen that pouring on for the last year or so through the social networks and through other what I would call nontraditional content companies.

And then the second thing that has happened this year has been the real onslaught of the advertising network business.

There are over 300 ad networks in the space now.

And so the combination of those two things has put some pressure on rate.

Having said that, as I said in response to the last caller, we have actually seen not only a -- we've seen strengthening in rate over most of the course of the year at NYTimes.com.

Where you will not see that is in the less premium inventory, which is the About.com display inventory.

So that's the disparity between the two businesses on the display side.

You will not have the same kind of weight strength in a brand that is not as strong as The Times brand, and think you'll see that across the rest of the industry, as well.

You saw it in Yahoo!'s results yesterday.

So the display business overall -- and I mean from an industry perspective -- from a rate perspective has weakened this year.

I don't think that you can say that the same thing from a pure CPM perspective has occurred at NYTimes.com.

You might want to --

The only two points I would add to what Martin said is the weakening that we've seen is really a direct result of the economic crisis.

That is absolutely our belief, number one.

Number two, it's important to just reiterate what I think we've said on these calls in the past is that we have significantly -- and Janet said it in her remarks -- significantly outperformed the marketplace on display advertising this year.

So again, I think a testament to our brand and to our audience and the quality of what we produce each and every day.

It's interesting.

If you look at the declines in the fourth quarter on the advertising side of digital half of the declines are accountable -- and that includes all of the lines of business we do; cost-per-click, eCom, all the lines of businesses we do --half of the declines are attributable to one category across the Company and that's help wanted.

So, it's a very targeted decline.

We're still cycling through that help wanted secular decline in the marketplace, and as Denise said, it's been exacerbated by this cyclical problem.

But when you consider that half of the declines were in one category it's a pretty interesting thing to think about.

And, Martin, one last one.

I'm sorry, but what percentage of your inventory are using with the ad networks in terms of having them sell it for you?

Well, it really depends on the property and we don't really talk about that publicly.

I would say that from an industry-wide perspective you're probably looking today at around 50%.

Some of our properties are above that, some of them are below that, but that's about where the industry is at this point.

Thanks so much.

And we take our next question from Craig Huber with Barclays Capital.

Please go ahead, sir.

Yes, good morning.

First off, on the pension I just wanted to get a little more clarity here.

As you said, if you take an assumption that nothing changes here in terms of the equity markets are flat for this year, the discount rate, all that, the government doesn't change anything, what are you budgeting or thinking about what next year's, 2010's, contribution to your pension could be, again if nothing changes here?

Eventually it could potentially be over a six-year period, I assume it would be more front-end loaded, so just as things stand right now what could it be potentially --(multiple speakers)?

I don't think potentially that much were front-end loaded, so I think $600 million over six years is $100 million and that's way I would be thinking about it.

Okay.

I don't view it as materially different from that number, but these companies the calculations are extremely complicated and are hard to be more precise than that.

And then also, as more and more companies are curtailing their pension funds on a go-forward basis still dealing with the obligations historical, of course, how much thought have you guys given to curtailing your own pension fund going forward?

This could obviously get way out of hand here.

Well, let me just say a couple things.

As one we did change our -- the benefit accrual formula earlier, as I said in my remarks, and that actually reduced our liability by about $70 million.

Curtailing a pension plan does nothing to reduce obligations, which is really the heart of the issue here.

You've got assets that perform, that support obligations.

Obligations are very, very heavily weighted towards past service.

That exists today and that doesn't go away.

A much smaller portion of that obligation relates to future things that would be addressable [through curtailment], for example, so I don't really -- while that issue is part of -- maybe part of that $600 million it doesn't really fully address that issue in any meaningful way, to be quite frank.

Well, that's -- sorry, that's what I mean, for your employees on a go-forward basis here is there a way that you could just shut down the pension going forward like other companies have.

Curtailing it going forward for employees there's now more build-up of the contributions, obligations going forward?

(multiple speakers) you could --

I'm just curious how much thought have given to potentially stopping it going forward?

Well, within the last four months we've adjusted the accrual formula so obviously we considered that issue and the way we settled that was reducing the accrual formula.

But again, that issue, what you're raising, is, I don't think -- doesn't address the $600 million issue.

Correct, correct.

But they were two separate issues, I just want to be clear in my answer.

And then my totally separate question, Janet, you mentioned January advertising trends here.

I've had a number of questions from investors, I just wanted to hear from you what has changed by the different newspaper advertising categories that have gotten worse here in the month of January year over year versus the trends you guys saw in the month of December?

Well, I think you are seeing retail after a very dismal fourth quarter having a much harder time and I think that they've pulled back quite dramatically.

As I noted, studio advertising has pulled back, as well, with fewer releases that we saw in January.

That continues.

I also think from a standpoint of classified that really is the biggest hit we are seeing I think in the January timeframe.

Martin noted that help wanted is such a huge portion of the decline across the entire Company and that is a direct result, certainly, of what the economic conditions are in the country.

So I think it's important to note that when you talk to media buyers they are saying that the beginning of the year is definitely a pull back, not to say that the second half is going to be robust, but they make it clear that indeed they are pulling back dollars the early part of the year and it really is across the board.

This is national retail and as noted very heavily skewed towards classified.

Denise, do you want to anything to that?

The only thing I would is one thing that's important to note if you're just looking at December and trending it from November is there's some products which is in those numbers that sometimes give you a faulty read in terms of how the numbers look.

So I think Janet's right.

January overall is trending very similar to the average trend of November and December.

Obviously different categories are reacting differently.

I think the luxury sector, for example, I think it's no secret what's happening in that sector.

They're absolutely impacted by what's happening in the retail marketplace so we're seeing a definite decline in spending there.

This is also not their biggest quarter, so again, you don't want to read too much into these trends, but it's important to understand what they are.

We are seeing a little bit of a lift in (inaudible), as Janet said.

These are difficult trends, but because it is -- the Oscar races are going on and Golden Globes, et cetera, January tends to be a little bit of a better month for us as a result of that, so I just wanted to note that.

We also did -- actually this month we're seeing a nice lift, as Janet pointed in her remarks, in inauguration advertising, as well, both online and in print, so that's important to note, as well.

But again, not a trend that will continue for the year.

Then one last one, please.

Your income from joint ventures was about $22 million in 2008.

Should investors assume the Red Sox portion of that is roughly $8 million to $10 million?

Obviously you're selling at stake, but is it fair maybe roughly $8 million to $10 million of that is from the Red Sox last year?

Or not that high?

Well, just give me a second.

Thank you.

Next question?

Yes, we'll get back to you on that, Craig.

Great, thank you, guys.

You're welcome.

That's all I had.

(Operator Instructions) And we take our next question from Alexia Quadrani with JPMorgan.

Please go ahead.

Thank you.

Just following up on your earlier comments on About.com.

You mentioned the investment into redesigning the site to more of a CPC model.

I guess my question is about the cost and how with that in consideration what you're outlook is for the cost of that business, giving they were up in the quarter and obviously revenue is still trending down, should we expect that cost item -- line item still to be up in the first -- for the first half of the year?

Well, as Janet said, the expenses in the fourth quarter -- she didn't explicitly say they were impacted by consumersearch but we did relaunch consumersearch in the quarter and that had an impact on expenses.

We also considerably improved our -- some of our technical and sales infrastructure in the business over the course of the year and that has -- that cost us a little bit of money, as well.

But to answer you question, no, the -- we're looking very, very hard, obviously, at the costs -- the expense side of that business now and we'll -- we expect to moderate the investments in the businesses as the year goes on.

Obviously that reflects the performance of the business, which as you can see is not consistent with the way it's performed in the past.

And then still on the cost side but on the print product, the outlook on newsprint pricing and maybe if you can tell us -- I think your LIFO accounting -- with newsprint pricing flattening and coming down when do you expect to see the benefit of that begin to flow though your cost line?

Certainly I think as we cycle through some increases that were occurring next year we are going to have negative comps.

You have to take a point of view as to how deep the decline could get.

My understanding is that [Rizie] is taking a point of view of 10% for the year.

For the full year this year our print prices were up 12% on a blended basis year over year, so it's certainly back half of the year if you believe that's the range.

We haven't really taken a clear point of view as to whether we think that's a high or a low number, but clearly back half of the year we will be cycling against negative comps in the first half and we hope that things turn in our favor the back half and that's our expectation.

And then just on last question.

I know it's a small part of your business, but the IHT, could you give an update on that and is it still profitable?

Look, we don't break it out.

It's -- I don't think it's really a factor either way in the performance of the -- it's not a material contributor either way on the performance of that segment.

I wouldn't say anything more than that.

Thank you.

And we'll take our final question from [Peter Appert] with Piper Jaffray.

Please go ahead.

Thanks.

John, can you talk to us a little bit about how you're thinking about ad pricing in '09 and whether in the context of all the turmoil in the media marketplace maybe it might make sense to experiment more with price discounting as a tool to drive unit growth?

We are at the Times and at the Globe leaving prices as is in regard to 2008, so there are no price increases in regard to those two properties.

And there are very, very minimal price increases at the Regionals in some of the markets.

So we are taking the position that indeed we are going to work with our advertisers in the current rate structure, certainly put programs together in regards to incremental advertising use of our products that put people in advantageous positions if indeed they commit to more incremental spending.

But from a discount perspective it really is not our practice to heavily discount.

We feel as though the audiences that we deliver to our advertisers are strong, whether it be print or online, and we want to make sure that indeed we're being paid correctly for them.

Once you start down that slope, and as you know, Peter, it's very hard to come back.

So I think we are working with our advertisers in regard to incremental things that we can do for them in regard to solidifying strong contracts, but also respecting the fact that we're delivering fine products with very engaged audiences.

Thank you.

And we will take a follow-up question from Craig Huber with Barclays Capital.

Please go ahead.

Yes, hello, I just want to ask, on online help wanted how much was it down in the month of December and also for the quarter?

Hold on one moment.

For the quarter -- this is print and online.

For the quarter at The Times it was down 43.5%, for New England it was down 39.1% and for the Regionals it was down 54.5%.

Do you have those percentages -- I'm sorry -- for just online help wanted?

Just online was down 35.7% for the quarter.

Do you have it for the month of December, please?

I do not have that --

Are you talking about, Craig, for the entire news group or are you just talking --

I'll take it for all three subsectors, sure.

Let me give you --

Online help wanted, whatever you have.

-- (inaudible) Group online help wanted was down 36%.

For December?

Correct.

Okay.

And, Craig, just to respond to your New England Sports Ventures, that's something we actually haven't given out.

That's a private company that we're not prepared -- the only thing I would say is for modeling purposes that's a very seasonal business and depending if you're trying to model what the joint venture could look post sale it just very -- the profits all come in the second or the third quarter or, if that's not the case, in the first and the fourth, so you'd have to understand that flow to model the business.

But we couldn't break that out for the reasons I just gave.

Okay, then one last question, if I could.

What would you say your editorial staffs at the Globe and The New York Times what's percent change of the number of employees editorial staffs year over year right now?

It's been relatively stable at the Times because we did have a headcount reduction there in the early part of 2008, but we've also added some folks, so it has not been a significant change.

As you do know, we did announce headcount reductions in the editorial positions at the Globe.

We did that earlier this month, so we would expect to see a decline in 2008, but that's still in the works, Craig.

Is that roughly maybe 8% to 10% at the Globe or not that big?

I don't believe that's correct, but I'll get back to you with the correct number.

Okay, thank you very much.

And we have a follow-up question from Edward Atorino with Benchmark.

Please go ahead.

Hi, thank you.

In general terms would 2010 expenses be able to be down versus '09 as you cycle through all this stuff and got some hangover from cost savings, or do you run out of stuff in '09?

We are on a path, as we have been for a very long time, to continue to look at cost reduction.

I think we've proven in the last four or five years that we are determined to restructure our business.

I think we started a lot earlier than a lot of people in our peer group and that's benefiting us and it's going to continue to benefit us going forward.

I think we have been creative in regard to how we look at cost reduction --

Yes, you have.

This isn't just [web width] reduction and section consolidation, this is closing of distribution facilities, plant consolidation, working with our unions, which has benefited us, both short term and certainly will benefit us long term.

I think we can say that we will continue on this path with great discipline going forward and you can count on us to do so.

One final final.

Would your pro forma interest expense be up something like $20 million next year with all the new debt coming on board?

Is that --

The only thing I can -- way I can help you get is I'm not going to talk about anything we haven't announced as being done, so the math -- the math you've done on the [Bersa] transaction you should think about -- some of that being used to offset against the revolver interest expense, but that about $100 million would presumably go against the November bonds, which are at about 7%.

So that's the way you ought to be thinking about modeling it.

I can't take -- I can't help you beyond what's been announced.

Got you, thank you.

And it appears there are no further questions at this time.

Ms.

Mathis, I would like to turn the conference back over to you for any additional remarks.

Thank you all for joining us today.

We appreciate your interest.

Bye, now.

And that does conclude today's New York Times conference call.

We appreciate your participation and you may now at this time disconnect.