The Bottom Line

Stop the Presses

Now, there are segments of this idea that don’t work yet. The Arts section generates big money with display ads. And Travel and Real Estate still make sense, but I don’t think they will for long, what with the proliferation of easy-to-use book-’em-on-site travel competitors, and in a world where the vast majority of home buyers now start their search on the Web. It’s the sellers that keep real-estate sections alive, and the real-estate ad numbers are up now because sellers are struggling with too much inventory in the region (a euphemism for the fact that homes aren’t selling that well anymore). I think that real-estate ads, as well as most classifieds, will go away as soon as Google rolls out its local editions of such things. Why pay for a full day’s listing when you can advertise on the Web for a fraction of the cost because you can take the ad down the moment the car, apartment, or summer home gets bought or rented? It is up to the Times to make a stand, now, to preserve the future of all of these sections before they are taken away by the local Google initiatives that must come for Google to keep its market cap growing and its stock price high.

Given the Times Company’s capital structure—notably the gigantic and soon-to-be-downgraded debt position that the company currently has, courtesy of ill-fated buybacks (most of the stock was purchased at much higher levels) and the big About.com buy—a radical shift to the Web could be fiscally impossible. But the brand itself, by near-universal consensus, is worth a ton more than is reflected by the company’s stock price. The family’s insulated structure may not allow it to cede full control, but 49 percent of the company could be sold for several billion dollars to help the company make the transition to being the first digital enterprise that used to be all-print. Then it would be positioned to make itself the ultimate news-and-information portal, challenging Google at its own game.

Before dismissing this outrageous proposal, however, consider the future for this company as well as all newspapers. The whole contingent gets valued as a wasting asset, where the worth will be smaller each year, and the only real buyers are the other companies themselves. That endgame runs out, eventually, too, because the McClatchys of the world, the buyer of Knight Ridder, have only so much firepower. Why not seize the moment, rather than waiting for the inevitable oblivion that all newspapers seem to be headed into? After all, how long can you just hope for a cyclical recovery in ads, as the New York Times has been praying for the last decade, when the economy has already boomed around it and is now facing more bustlike conditions? Endless declines in earnings estimates await the company, so what is the point of maintaining the status quo?

I am sure the company will laugh at this proposal. But consider how, in a very short time, its About.com division, despite its 1 percent of revenues, now generates 3 percent of profits. Is there any real question what the driver will be ten years from now? Why not just jump it and become the international paper of record, rather than just a cumbersome local paper with some national brand? The Times could become, say, the No. 1 news source in China. So, when you see the tables gone and you hear about the dismal earnings, remember, it doesn’t have to be this way. The Sulzbergers all know what has to happen. Why delay the inevitable? Digital’s not the way of the future; it’s already the present. Come on, Times , make the move!

James J. Cramer is co-founder of TheStreet.com. He often buys and sells securities that are the subject of his columns and articles, both before and after they are published, and the positions he takes may change at any time. At the time of this writing, he owned Halliburton and Altria.

E-mail: jjcletters@thestreet.com.