March 20 (Bloomberg) -- New York Times Co., which hired executive-recruiting firm Spencer Stuart to conduct a search for a new CEO, is focusing on external candidates, according to a person with direct knowledge of the situation.
The company is looking outside its own ranks to find a successor to Janet Robinson, who was pushed out in December, though it hasn’t made a final decision, said the person, who declined to be identified because the matter is private. Times Co. also has internal candidates, the person said.
Times Co. has suffered from industrywide declines in print advertising, driving its sales down every year since 2006. Its shares have lost more than 70 percent over the same period, and the lack of a CEO is part of what’s depressing the stock price, Douglas Arthur, an analyst at Evercore Partners Inc. in New York, said in a phone interview.
“Since Robinson left, the stock has gone nowhere despite an unbelievable rally in the market,” said Arthur, who recommends buying the shares. “It’s disappointing.”
Eileen M. Murphy, a spokeswoman for New York-based Times Co., confirmed in a phone interview today the publisher has retained Spencer Stuart. Chairman Arthur Sulzberger Jr. has been acting chief executive since Robinson’s departure.
Leading internal candidates for the CEO position include Chief Advertising Officer Denise Warren and Scott Heekin-Canedy, president and general manager for the New York Times Media Group, the person said.
Murphy declined to comment on potential candidates. Evercore’s Arthur said an outside executive would better meet investors’ expectations.
Creative Problem Solver
“They’d be best served by getting someone with digital experience and with brand experience, a creative problem solver,” according to Michael Speck, a partner with executive search firm Heidrick & Struggles. “You don’t necessarily need someone with publishing background.”
Times Co. rose 0.7 percent to $6.92 at the close in New York. The stock has declined 8.1 percent since Robinson’s departure was announced, while the Standard & Poor’s 500 Index has advanced 16 percent.
Robinson received an exit package, including stock options and retirement benefits, of $23.7 million. That’s more than Times Co. earned in net income in the past four years, according to data compiled by Bloomberg.
Times Co. is struggling to replace declining print advertising with online revenue. The company said today it will further restrict free access to its news articles online starting in April, limiting the amount of stories available to non-paying users to 10 a month from 20.
Readers who come to articles through links shared via e-mail, blogs, or social media channels such as Facebook Inc. and Twitter Inc. can read stories after going past the limit.
The publisher started its digital-subscription program a year ago with the New York Times website. The company now has 454,000 paying online subscribers for all its sites, up from 406,000 at the end of the year.
“That’s a little below what we were expecting,” Citigroup Inc. analyst Leo Kulp, who was looking for 467,000 paying subscribers a year after the company began charging for online access. He lowered his recommendation for the stock to neutral from buy in October.
“We became more bearish on the stock seeing the paywall is not going to offset the print declines,” he said. The company’s shares have declined more than 20 percent since it introduced the paywall.
U.S. newspapers lost $10 in print-advertising sales for every $1 gained online last year, Pew Research Center said this month. That’s a sharper loss than in 2010, when newspapers lost $7 in print advertising for every $1 made from digital outlets.
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