Operating costs increased slightly to $ 421.4 million, an increase of just over 1% from last year. The company spent less on travel and entertainment costs due to the pandemic, but it hired more people. General and administrative expenses increased 7% to $ 56.6 million.
For the current quarter, The Times expects subscription revenue to increase 15% from last year. Digital subscriber revenues are expected to increase by 30%, the company said. It would be a slowdown from 2020, when The Times had a strong readership gain. It was one of the heaviest news cycles in recent memory as the country was battered by the coronavirus pandemic, saw the rise of a social justice movement following the murder of George Floyd and voted in a hotly contested presidential election.
Advertising is expected to pick up strongly. The company estimates a jump of 55 to 60% from a year ago, when ad spending was severely cut due to the pandemic. Digital advertising is likely to increase even more, from 70% to 75%. Costs are also expected to increase as the company plans to spend more marketing dollars to attract new subscribers. Capital spending is expected to reach up to $ 50 million this quarter.
The Times is in negotiations with the NewsGuild, the union which represents approximately 1,400 newsroom workers. Increasing wages and benefits, as well as a better defined structure to improve diversity and inclusion, are the main goals sought by the union. A new agreement could result in higher costs for the company.
In April, the NewsGuild also asked The Times to recognize a newly formed union of tech and digital workers. In an email sent to staff on April 22, Ms. Levien effectively refused. “We believe the right next step is a democratic process that highlights all the facts, answers questions from employees and managers, and then lets employees decide through an election,” she said.
The company’s cash stack remains high, at over $ 890 million, and its free cash flow – a measure of a company’s financial weight – has grown steadily over the past three years. In 2020, it averaged around $ 65 million in free cash flow each quarter, according to S&P Capital IQ estimates.
The Times has also increased dividend payouts to shareholders every few years. It now pays 7 cents per share each quarter, costing about $ 46.8 million per year, payments that benefit the Ochs-Sulzberger family who control the Times.