What Berkshire Sees in The New York Times — and What the Numbers Say

Berkshire Hathaway has spent three quarters buying shares of The New York Times Company. It started with roughly 5 million shares in the fourth quarter of 2025. By the end of the first quarter, the stake had tripled to more than 15 million. In the second quarter, Berkshire added another half-million shares at prices between roughly $80 and $95, bringing the total to 15.7 million — a position now worth about $1.1 billion.

This was not the newspaper business Buffett called "toast" when Berkshire sold its 31 papers in 2020. The New York Times has been a digital subscription company for years, and the question this stake raises is straightforward: does the underlying cash flow justify the price, and does the market's recent reaction to a growth slowdown warrant attention or concern?

The growth story is still there, but it is losing speed. The Times added 450,000 digital subscribers in the fourth quarter of 2025, 310,000 in the first quarter of 2026, and 280,000 in the second quarter. That last number missed Wall Street's estimate of roughly 295,000. Total subscribers now stand at about 13.35 million, and management remains on pace for its stated goal of 15 million by the end of 2027 — which means it needs to add roughly 550,000 per quarter going forward. Subscriber growth has decelerated for two consecutive quarters. The stock fell more than 13 percent the day the results came out in early August.

But the market's focus on subscriber growth masks something that is more important for an owner of the business: the cash flow.

The Times generates about $623 million in free cash flow per year. Capital expenditures are just $35 million annually. That means almost all of the $658 million in operating cash flow flows through to the bottom line. The company does not need to rebuild infrastructure or make heavy reinvestments to keep producing. Revenue grew 10.8 percent last year and 11 percent in the second quarter of 2026. Digital subscription revenue alone is climbing above $400 million a quarter, and average revenue per subscriber is ticking higher.

At a market capitalization of roughly $11 billion, that $623 million in annual free cash flow is a 5.7 percent yield. Berkshire bought at $80 to $95, which would have been closer to 4.5 to 5 percent. The stock is now at $67 — below both the initial purchase range and the second-quarter buys. Berkshire is underwater on the later purchases, but the cash flow yield at today's price has improved.

That is the kind of calculation a value investor works from. The question is whether the cash flow can hold.

Two factors support the durability of this number. First, subscription revenue — the bulk of the Times' income — is collected in advance. It does not require heavy capex to deliver. Second, the balance sheet is conservative. Total debt is $937 million against $2.05 billion in equity. With $233 million in cash, net debt is negligible. The payout ratio sits at roughly 31 percent of earnings, leaving wide coverage for the dividend, which the company has raised for six consecutive years.

The risk is the other side of the subscriber slowdown. Subscriber growth at 450,000 per quarter supported revenue growth above 10 percent and justified premium multiples. If additions settle closer to 280,000 — the most recent pace — annual revenue growth drops materially below the rate investors have been paying for. The stock trades at a trailing P/E of about 28. Forward earnings, which already bake in a slowdown, imply a forward P/E near 41. That is not a value multiple. It is a premium multiple attached to a growth story that is decelerating.

This is where the two readings of the Times diverge. One view holds that the subscriber slowdown is a temporary bump — a busy news cycle, tight consumer spending, seasonal variation — and that the path to 15 million subscribers is intact. Under that reading, the recent sell-off has created a gap between a durable cash flow business and its price. Berkshire's patient accumulation would support this view.

The other view is that 280,000 additions per quarter is a more honest signal of where the business is heading. Adding 1.65 million more subscribers by the end of 2027 requires roughly 550,000 per quarter — double the most recent run rate. If the market eventually prices the Times closer to a 350,000-subscriber-addition business rather than a 450,000 one, the forward earnings multiple of 41 may compress meaningfully. A growth company that stops growing at the rate you paid for is a multiple-contraction company.

Neither view has been proven wrong yet. The Times has not missed revenue estimates, adjusted operating profit grew 16 percent in the second quarter, and management is still guiding to double-digit growth in digital subscription revenue and mid-to-high teens growth in advertising for the third quarter. ROIC at 18.5 percent remains strong. The business economics are sound.

What the numbers show is that Berkshire is betting on the durability of a cash flow stream that the market has momentarily discounted. The investment works if subscriber growth stabilizes and the cash flow holds. It is exposed if growth decelerates further and the premium multiple compresses. Berkshire's average cost — roughly $80 to $95 for the larger bulk of the position — means this is not a bargain at entry. At today's price of $67, the cash flow yield is better, and the gap between what the business earns and what it trades at has widened in favor of the buyer.

For a retail investor, the lesson is narrower than following Berkshire into a name. The Times is a real business with real cash flow, modest capital needs, and a conservative balance sheet. But it is also a business trading at a premium valuation attached to a growth story that is slowing. The investment makes sense only if you believe the subscriber pipeline remains strong enough to support the multiple — or if you believe the current price has already priced in more disappointment than is likely to come.