Wall Street is bracing for the New York Times to get bloodied in an ad war with The Wall Street Journal, which is spoiling for a fight after launching its local metro section today.
The Journal’s “Greater New York” — a mix of politics, real estate, crime, society and sports coverage — is giving advertisers a new alternative for targeting the New York market. The section will run six times a week and range from eight to 12 pages.
While the Journal has been reinventing itself as a more general interest publication, the metro section will be the first direct competition the Times has faced from another broadsheet in years. “If you’re the only one in the pool and someone jumps in, you’re going to lose water,” said Edward Atorino, an analyst at Benchmark Co. “The question is how much.”
During a conference call to discuss earnings last week, a Times executive acknowledged its new competitor for the New York market but played down the threat.
“We’re seeing pressure, but we don’t believe it’s so far having any effect on our business,” said Scott Heekin-Canedy, the paper’s president. “Some of the rates that are out there from the Journal are deeply discounted.”
The Journal, part of News Corp.’s Dow Jones unit, waves off claims of undercutting the competition. (News Corp. also owns The Post.)
“Competitors have been accusing each other of rate cutting since the beginning of time,” said Michael Rooney, the Journal’s chief revenue officer. “The simple fact is that the Times’ ad revenue is down 12 percent and our print ad revenue is up 25 percent in the latest quarter.”
Shares of the Times Co. fell for a second day on Friday, dropping 68 cents, or 5.5 percent, to $11.61. On Thursday, the company reported first-quarter results that showed ad declines were easing but that the market had not yet hit bottom.
Despite the pressure on ad rates, media buyers don’t foresee advertisers abandoning the Times for the Journal’s Greater New York.
“It’s an attractive opportunity for advertisers looking to heavy up in the New York market,” said George Jansen, director of print at WPP’s GroupM media-buying unit. “Do I think they will pull out of the Times and put it all in the Journal? Absolutely not.”
The Times has some factors in its favor. Roughly half of the paper’s more than 900,000 daily print subscribers are in the New York market.
While the Journal has 1.6 million print subscribers, Greater New York is expected to reach about 300,000 readers. The paper also skews more heavily male than the Times, which makes it a tougher sell for retailers.
Still, Bloomingdale’s and Bergdorf Goodman are advertising in the new section, according to Ad Age. Both also advertise in the Times and fall into the paper’s high-end, New York-centric retail base.
If a price war breaks out, analysts believe the Journal can tolerate far more pain than the Times, which has been on shaky financial footing. The company had to sell assets, including its Midtown headquarters, and borrow money from Mexican billionaire Carlos Slim at a 14 percent interest rate to shore up its finances.
“You are dealing with an established competitor going after your sweet spot in terms of advertisers,” said Benchmark’s Atorino. “Also the owner has deep pockets in News Corp.” holly.sanders@nypost.com