The New York Times Co. has reviewed its dividend policy in the face of an unprecedented decline in advertising revenue across the newspaper industry, slashing its quarterly dividend to 6 cents a share from 23 cents. The announced cut, which will result in annual savings of $98 million for the company, applies to both publicly held Class A shares as well as nonpublic Class B shares, which hold powerful voting rights and are largely controlled by the Sulzberger family.

The Sulzberger family, through a trust and various family members, together own about 19 percent of the company, and the cut implies that their annual dividend income would be reduced to about $6.6 million from about $25 million. Chairman Arthur Sulzberger said the cut, coupled with our other actions, will help them decrease debt and improve the liquidity of the company.

Ken Doctor, a news industry analyst for Outsell Inc. said the savings from the substantial dividend cut may not be enough, as the company has already lost more than half its stock value in the past month. The stock fell another 9.9 percent Thursday amid a broader market decline, closing down 63 cents at $5.72, a new 52-week low.

In a statement, the founding Ochs-Sulzberger family's trust said that "while the decision was very difficult for all shareholders, it is the appropriate and prudent business response given the extraordinary challenges of the current economic environment."

The weakened US economy, stifled by the sub-prime mortgage crisis, has, in fact, dealt a punishing blow to classified advertising revenues, which for decades the main source of income for newspapers.