Keeping a newspaper afloat in the digital economy is difficult. Leading a newspaper to quadruple its market value in the digital economy is almost unthinkable. However, this is exactly what The New York Times Company CEO Mark Thompson has done.
The Times' — a publicly traded company — has grown its stock value by over 300% since Thompson took control in 2012 and at a time when countless other city papers across the country have closed. The key, Thompson said, is centered around a business strategy that he says "very few people" in the industry are following.
"Our model is a very simple model which is we should invest in great content," Thompson said at CNBC's Evolve event Wednesday in New York City. "The future of journalism is make more journalism ... and then figure out smart ways to put that in front of people and asking them to support that journalism."
Shares of the Times have risen over 200% since Trump was elected.
Thompson said this new strategy makes The New York Times comparable to a company like Netflix while competing newspapers focus far too much on cutting costs.
The circumstances facing the company when Thompson took over in November 2012 were bleak. Quarterly advertising revenue had fallen 9% and net income was down over 80% as compared to the prior year. The stock price fell 22% on the announcement.
To combat these headwinds, Thompson immediately organized the newspaper's print products and services, the company's hallmark, as a separate division. This allowed Thompson to instill a new vision for The Times.
"We said we're going to focus mainly on building our digital subscription business," Thompson said, a massive cultural shift for the company.
Accomplishing this forced the company to consider advertising revenue as a secondary source of income and instead go all-in on "products and revenue which are currently a small percentage of the total but are ... possibly all of our future," Thompson said. This meant dedicating far more resources to creating a strong digital environment for the paper.
Thompson was warned by many friends within the company how hard it would be to change the strategy and culture of a well-established brand like The New York Times.
"The majority opinion of my friends [was] don't touch it with a barge pole," Thompson said. "It's a block of concrete. You'll never move it. It's so set in its ways."
Knowing the company had to evolve if it wanted to survive, Thompson adopted what he calls a value-based leadership approach.
"Once you convince people that you really believe in the fundamentals of the product and the values, then you earn permission to start talking about those things where you do need to make changes," Thompson said. "The trick is not to try and come up with a strategy and impose it on an organization. The trick is to encourage and cajole and help the organization come up with its strategy ... and so because they come up with it, it's their strategy. They own it."
One of these changes included transforming The New York Times morning routine. Before 2012, the newsroom at 7:00 a.m. consisted of only "four or five guys with vacuum cleaners," Thompson said. However, when he realized 7:00 a.m. was the peak time for smartphone consumption, Thompson made sure the newsroom was in full swing.
News readers and investors have endorsed the changes. The company added 223,000 new digital subscribers in the recent quarter, bringing the total to 4.5 million. In an era where newspapers are being sold for as little as $1, The New York Times Company is now worth over $5.6 billion despite being worth just over $1 billion when Thompson took over.