Strategic Alliances for the NY Times

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I'm having a great final semester with some very cool classes, one of which is Strategic Alliances. Our group batted around a number of ideas, but here's what we've gotten approval to do. In a nutshell, we're going to present to the Board of the NYT and ask for resources to pursue single or multiple strategic alliances. 45 min presentation to a "Board" consisting of Professors, Alumni, and fellow students.

Would like to crowd source some research and get your best ideas on the below. Please include appropriate references so that we can properly cite.

Much thanks in advance.
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Proposal: NY Times. The NY Times proposes strategic alliances with either single or multiple distribution outlets to in order to maximize subscriber base and revenue.

Background: The NY Times, like other major newspapers, is struggling with an appropriate revenue model. Newspapers have more readers than ever. Their content, as well as that of news magazines and other producers of traditional journalism, is more popular than ever — even (in fact, especially) among young people. The problem is that fewer of these consumers are paying. Instead, news organizations are merrily giving away their news.

Newspapers and magazines traditionally have had three revenue sources: newsstand sales, subscriptions and advertising. The new business model relies only on the last of these. That makes for a wobbly stool even when the one leg is strong. When it weakens — as countless publishers have seen happen as a result of the recession — the stool can't possibly stand.

Henry Luce, a co-founder of TIME, disdained the notion of giveaway publications that relied solely on ad revenue. He called that formula "morally abhorrent" and also "economically self-defeating." That was because he believed that good journalism required that a publication's primary duty be to its readers, not to its advertisers. In an advertising-only revenue model, the incentive is perverse.

According to the Times's Q308 10-Q, the company spends $63 million per quarter on raw materials and $148 million on wages and benefits. Speculation and hearsay put the wages and benefits for just the newsroom are about $200 million per year. After multiplying the quarterly costs by four and subtracting that $200 million out, a rough estimate for the Times's delivery costs would be $644 million per year.

The NY Times is a news organization, not a newspaper. Much as the railroad executives loved railroads, they weren't in the railroad business, they were in the transportation business. And so the NY Times must evolve from a newspaper business, to a news business. From a strategy perspective, it makes little sense for the NY Times to grow its distribution outlets internally due to capital intensive expansion, but what is needed is for the NY Times to explore all methods of distribution and media dissemination if they are to survive.

Lest it remain the domain of bleeding-heart, elitist, latte-sipping, Volvo-driving, tree-hugging, whale-saving, tax-and-spend, cut-and-run liberals that want to take away our guns so the terrorists win, give all of our hard-earned tax dollars to welfare mothers and illegal immigrants, and then cozy up to genocidal dictators all around the world.

Solution: Wu Tang Risk Management seeks approval from the NY Times board to appropriate funds to pursue either single or multiple strategic alliances.