writedown

Case Study The New York Times Company announced in early 2007 that it would take a $814.4 million writedown on the value of two of its newspapers. New England's flagship newspaper, the Boston Globe, had been purchased by the Times in 1993 for $1.1 billion, and the Worcester Telegram & Gazette was bought for just under $300 million seven years later. A continuing deterioration in circulation and advertising revenues was plaguing the newspaper industry, thereby reducing the value of its properties and occasioning the writedown. The result was a quarterly loss of $648 million, or $4.50 per share, although earnings excluding the charge were a positive $88 million, or $.61 per share. The writedown caused a reduction of assets and equity on the firm's balance sheet. A company official commented that while the profitability of the print media remained challenging, the firm's digital properties were very promising.