Last month, The New York Times Company (NYSE: NYT) board cut the Sulzberger family take-home pay — and increased the flow of money to the company — by cutting dividends. This week, according to the NYT, it’s planning to mortgage or even work a sales-lease on the family “home”: up to $225 million on the 58 percent of the Times Tower owned by the company. CFO Jim Follo told the paper the company has hired Cushman & Wakefield to get the financing through either a mortgage — the NYTCo share of the mid-Manhattan tower is not mortgaged now — or possibly a sale that would include leasing back the space. Developer Forest City Ratner owns the rest of the building.
The property long has been a sore point with some investors, who don’t believe the NYTCo should be in the real-estate business. The dividend cut and real-estate fundraising are part of the company’s efforts to deal with a toxic mix of debt, shrinking profits exacerbated by the economy, and downgrades in its bond ratings as it heads towards refinancing a major line of credit. This May, one of the company’s two $400 million revolving credit agreements comes due; the other comes due in 2011. The combination of factors will make the batch of credit more expensive and trickier to manage, although executives continue to stress their belief that the debt and credit obligations can be managed, We’ll hear more Tuesday when Follo and CEO Janet Robertson speak to analysts at the UBS Global Media and Communications Conference.