Operating costs rose slightly, to $421.4 million, an increase of a little more than 1 percent over last year. The company spent less on travel and entertainment expenses because of the pandemic, but it has hired more people. General and administrative costs rose 7 percent, to $56.6 million.
For the current quarter, The Times expects subscription revenues to increase 15 percent compared with last year. Revenue from digital subscribers is likely to rise 30 percent, the company said. That would be a slowdown from 2020, when The Times had a sharp gain in readership. 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 after the killing of George Floyd and voted in a hotly contested presidential election.
Advertising is expected to pick up mightily. The company estimates a 55 percent to 60 percent jump from last year, when ad spending was severely curtailed because of the pandemic. Digital advertising is likely to rise even more, at 70 percent to 75 percent. Costs are also expected to increase as the company plans to spend more marketing dollars to attract new subscribers. Capital spending should reach as much as $50 million this quarter.
The Times is in negotiations with the NewsGuild, the union that represents about 1,400 newsroom employees. Increased salaries and benefits, as well as a better defined structure for improving diversity and inclusion, are key goals sought by 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 union of tech and digital employees. In an email sent to the staff April 22, Ms. Levien effectively declined. “We believe the right next step is a democratic process that surfaces all the facts, answers questions from employees and managers, and then lets employees decide via an election,” she said.
The company’s cash pile remains high, at more than $890 million, and its free cash flow — a measure of a company’s financial heft — has been steadily rising over the last three years. In 2020, it averaged about $65 million in free cash flow each quarter, according to estimates by S&P Capital IQ.
The Times has also increased dividend payouts to shareholders every few years. It now pays 7 cents a share each quarter, which costs about $46.8 million a year, payments that benefit the Ochs-Sulzberger family that controls The Times.