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TheStreet Open House

Jill Abramson Firing Immaterial to Analysts

NEW YORK (TheStreet) - The abrupt firing of Jill Abramson, the first female Executive Editor of the New York Times (NYT), may have created a media sensation. Equity analysts, however, could care less.

>> Read More: New York Times Tumbles As Abramson Is Abruptly Fired

No analyst covering the New York Times stock changed their ratings on the newspaper company's shares on Thursday, according to Bloomberg data. Morningstar analyst Liang Feng said in a telephone interview Thursday that an abrupt CEO or CFO change would be material, however, there is little to be made from Abramson's firing in the near-term.

"It is really hard to draw any conclusions," Feng said.

Wall Street's muted reaction to Abramson's firing indicates that it hardly matters who is managing America's largest newsroom, and the de facto paper of record, in the eyes of analysts. Whether it's Jill Abramson, or incoming Executive Editor Dean Baquet, the first black man appointed to run the Times' newsroom, it just doesn't appear to matter.

Shares in the New York Times haven't fallen much more than the broader market since the firing was made public on Wednesday afternoon. The Times was down less than 1% at $15.02 in late Thursday afternoon trading.

Wall Street may be wrong to dismiss the Abramson firing as an immaterial event.

Yes, it is people like CEO Mark Thompson and CFO Michael Golden who are responsible for devising the Times strategy and managing the company's purse strings. Recently, the Times decided to reinstate a quarterly dividend, something that might have been hard to imagine just a few years ago when the paper teetered on the brink of bankruptcy.

Still, it's the newsroom that ultimately builds the product that readers and advertisers pay for. That the Times has grown subscribers and revenue in recent years amid the replacement of print subscriptions with digital, and the emergence of user generated platforms like Twitter (TWTR) and Facebook (FB), signals strong execution.

Last quarter, the Times reported growth in both print and digital advertising revenue, with overall ad revenues growing 3% year-over-year. The company also added more net digital subscribers in the first quarter than at any time in 2013. Overall, digital subscribers rose 5% to 799,000 in the first quarter.

"[We] are certainly not claiming victory in advertising yet; we expect continued month-to-month volatility and recognize that we will face some significantly tougher year-on-year comparisons as the year goes on," CEO Thompson said.

Was it Thompson, Chairman Arthur Sulzberger Jr., and other top executives who helped those growth numbers, or were they the spoils of strong performance in the Times newsroom since Abramson was appointed Executive Editor?

Amid cost cuts and a digital advertising model that often favors trivial content, the Times appears focused, still setting the agenda on many of the biggest national and international news stories. Will Baquet be a strong replacement to Abramson? We don't yet know. Did Abramson hold the Times back on its digital endeavors? That also is unclear.

Still, Abramson's firing may have a bigger impact on the Times performance than many on Wall Street expect. A report recently released by the Times shows that the company believes it has fallen behind in its digital efforts, harming readership and engagement.

Hopefully, the Times has found the right person to improve perceived areas of weakness. However, if, as some media reports suggest, Abramson's firing was the result of personality conflicts and an internal power struggle, it may be an issue that could loom large over the paper for quarters to come.

Bottom Line: If the Times didn't claim victory in the first quarter, the company may have just snatched defeat in a year that began with much promise.

>> Read More: New York Times Tumbles As Abramson Is Abruptly Fired

-- Written by Antoine Gara in New York.

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