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All the Risk thatís Fit to Disclose
The American Thinker ^ | 3 02 06 | Thomas Lifson and Jack Risko

Posted on 03/02/2006 8:20:31 AM PST by Kitten Festival

A notable decline in the core business of the New York Times Company has been underway, and yet is not reported in a straightforward way in the company’s official filings with the Securities and Exchange Commission. The SEC requires companies to file Form 10-K every year, to provide

“a comprehensive overview of the company’s business and financial condition and… audited financial statements.”

The SEC’s 10-K official rules require companies to

“Provide any discussion of risk factors in plain English….”

At the beginning of its 2005 10-K annual report to the Securities and Exchange Commission, the New York Times Company proudly said this about its flagship newspaper:

“The Times had the largest daily and Sunday circulation of all seven-day newspapers in the United States.”

Circulation and risk

The Times’ statement is not just about bragging rights. Circulation size is a key determinant of the rates it can charge advertisers. Advertising revenues rise and fall with circulation. Of course, so does direct circulation revenue, the portion of the cover price received by the publisher.

Securities holders and potential buyers of a newspaper company’s securities assess the business risk of the company in part based on a fair understanding of its circulation performance and prospects.

The newspaper industry has been troubled by considerable outright fraud in circulation claims by newspapers. The past decade has seen severe declines in circulation among major metropolitan dailies. Investors have reason to be concerned, and the industry is roiled by the possible purchase and break up of Knight-Ridder, a major player.

In comparison with dismal industry circulation trends, the Times’ ability to hold onto and even expand circulation appears impressive. In 1999, its daily circulation was 1,109,700 and in 2005 its daily circulation was 1,135,800, up 2.35%.

(Excerpt) Read more at ...

TOPICS: Business/Economy; Crime/Corruption; Culture/Society; Government; US: New York
KEYWORDS: disclosure; law; newyorktimes; pressbias

1 posted on 03/02/2006 8:20:32 AM PST by Kitten Festival
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