Analyst: NYT Paywall Won’t Overcome Print Losses

A Citigroup analyst downgraded the New York Times’ stock from “Buy” to “Neutral,” saying that the loss in print advertising will be greater than any revenue made up from digital subscriptions, the AP reports.

When the New York Times company revealed in its third quarter earnings report that it had 324,000 digital subscribers, that number was hailed as a positive sign (it was, after all, 40,000 more subscribers than it had at the end of the second quarter).

But Citigroup analyst Leo Kulp looked to the future. Right now, another 100,000 people are getting free subscriptions to through a sponsorship deal with Lincoln that ends at the end of the year. He figures that when the deal ends, some of those sponsored readers will switch to paid subscriptions.

But even if “a substantial number” of those readers pay up, Kulp estimates that the Times is going to lose more in a decline in print advertising. He estimates that the Times will bring in an extra $70 million a year from all paywall payer-uppers, but that it could lose $80 million in the next year in advertising.

However, Kulp thinks the Times’ stock could hit $8, up from $7.33 Wednesday, within the next year. There you go, Leo – thanks for showing some love.