New York Times stock sinks after reporting subscriptions, revenue missed estimates — and tech staff strikes
Shares of the New York Times plunged Monday after the left-leaning Gray Lady reported third-quarter revenue and subscriptions that fell short of analysts’ expectations – hours after tech workers walked out ahead of Tuesday’s election.
The company added 260,000 digital-only subscribers in the quarter, below the 300,000 in the previous quarter as readers cut back on spending in an uncertain economy.
Analysts polled by Visible Alpha had expected the addition of 280,200 subscribers.
New York Times stock fell 7.7%, closing at $52.45.
“U.S. consumers’ interest in paying for news remains limited … (Additionally,) the subscriber miss was narrow, and could just be a function of competition,” said eMarketer analyst Max Willens.
The results suggest high inflation was affecting the paper’s strategy of driving growth through bundling its core news offerings with lifestyle-focused products such as Wirecutter, sports website The Athletic and games including Wordle.
The Times forecast subscription revenue to increase by 7% to 9% in the fourth quarter, the midpoint of which was slightly below estimates of 8.2%, according to data compiled by LSEG.
In the third quarter, subscription revenue rose 8.3%.
Total revenue of $640.2 million was in line with estimates of $640.8 million, as digital advertising thrived.
The mixed results were announced after the 600-member Tech Guild went on strike early Monday morning.
AG Sulzberger, the newspaper’s publisher and chairman of its parent company, said he expects the work stoppage to last through Election Day – potentially threatening the site’s functionality on the most widely anticipated news day in the last four years.
“While I’m disappointed by this decision, I want to emphasize to all of you that we have robust plans in place to ensure that our essential journalism still reaches our readers,” Sulzberger wrote in a memo to staffers on Monday afternoon.
The labor standoff follows more than two years of acrimonious negotiations that included some unusual demands like job security for non-citizens in the US on work visas and mandatory trigger warnings during company meetings that involve discussions of news events.
The Times’ Tech Guild did not immediately respond to a request for comment.
Striking staffers, who voted on Sept. 10 to authorize a work stoppage, walked a picket line at the company’s Midtown headquarters on Monday.
The union asked readers to “honor the digital picket line” and not play popular Times games like Wordle or use the Times’ cooking app, according to the Wall Street Journal.
“We have been sounding the alarm for weeks and cleared our schedules to get this contract done before the election week deadline,” said Susan DeCarava, president of the NewsGuild of New York. “We’re disheartened that the Times is willing to gamble with its election coverage to avoid agreeing to a fair and just contract.”
The union said it was fighting for the inclusion of a “just cause” provision to protect workers in the face of rapidly improving artificial intelligence technology, pay equity for women and minority members and full-time remote work options.
The Times’ tech workers are some of the highest-paid employees at the company, earning a yearly salary of $190,000 on average — $40,000 more on average than journalists in the Times Guild, according to the New York Times.
In an email to workers on Sunday, Times management said it had offered the union a 2.5% annual wage increase, a minimum 5% pay increase for promotions and a $1,000 ratification bonus.
The Times said it would maintain its current hybrid requirements of two days of in-person work per week through June 2025.
The company also allows employees to work fully remotely for three weeks per year.
The New York Times told its Tech Guild that it agrees on the importance of “just cause” provisions, which prevent workers from being fired unless there is sufficient reason, but believed it was management’s decision to determine “just cause” — not a third party’s.
The Times also challenged the guild’s claims about pay equity and race. The guild’s methodology compares the average compensation among different identity groups, instead of comparing compensation among employees in similar roles, the company told the Tech Guild.
