Operating costs increased slightly to $ 421.4 million, an increase of just over 1 percent year over year. The company was spending less on travel and entertainment due to the pandemic, but it has hired more people. General and administrative expenses increased 7 percent to $ 56.6 million.
For the current quarter, The Times expects subscription income to increase by 15 percent over the previous year. According to the company, sales with digital subscribers should increase by 30 percent. That would be a slowdown from 2020 when The Times saw a sharp increase in readers. It was one of the toughest news cycles in recent times as the country was hit by the coronavirus pandemic, a social justice movement emerged following the assassination of George Floyd, and voted in a hotly contested presidential election.
Advertising is expected to gain a lot of momentum. The company estimates the increase at 55 to 60 percent from last year, when advertising spending was cut sharply due to the pandemic. Digital advertising is likely to increase even further by 70 to 75 percent. Costs are also expected to rise as the company plans to spend more marketing dollars trying to get new subscribers. Investments should reach $ 50 million this quarter.
The Times is in negotiations with the NewsGuild, the union that represents around 1,400 people in the newsroom. Higher salaries and benefits as well as a better defined structure to improve diversity and inclusion are important goals of the union. A new deal could result in higher costs for the company.
In April, the NewsGuild also asked the Times to recognize a newly formed association of technical and digital employees. In an April 22 email to staff, Ms. Levien effectively refused. “We believe the right next step is a democratic process that brings all the facts to light, answers questions from employees and managers, and then lets employees make choices,” she said.
The company’s cash pile remains high at more than $ 890 million, and free cash flow – a measure of a company’s financial strength – has grown steadily over the past three years. In 2020, S&P Capital IQ estimates that the average free cash flow for the quarter was $ 65 million per quarter.
The Times has also increased dividend payments to shareholders every few years. It now pays 7 cents a share per quarter, which costs about $ 46.8 million a year. These payments go to the Ochs-Sulzberger family, who control The Times.
