Nobody has been affected by the rise of the Internet quite like old-school media companies. Literally billions of dollars worth of advertising has found its way online, largely at the expense of newspapers and television. And the rise of online news properties and news aggregators like Google (NASDAQ:GOOG) News makes it ever harder for newspapers to keep their subscribers.

With the recent past looking so bleak, and the future not appearing much brighter, why on Earth would anyone want to consider investing in a newspaper? Cash flow. Lots of cash flow. New York Times (NYSE:NYT) managed to throw off some $276 million worth of operating cash flow over the four quarters most recently reported as of this writing. That's nothing to sneeze at, and for a company whose market cap weighs in at a mere $3.3 billion, it represents a decent price for an exceptionally strong brand.

Oops. Did I write "brand"? I meant "brands." In addition to the flagship The New York Times, the company also owns The Boston Globe and The International Herald Tribune, among others. On the Internet, the Times has taken an "if you can't beat them, join them" attitude, and owns not only the sites for its namesake brands, but also While may not generate all the buzz of some more vocal sites, it does clock in as one of's top 100 global sites. When you peek under the covers, you quickly find that New York Times is not just a giant among old-world media companies, but also a serious force on the Web, too.

Cash out
While electronic media has caused all sorts of trouble for the newspaper business, there's an endearing quality to newsprint that helps to keep subscriptions relatively stable. Perhaps it's the exceptional portability of the format. Or maybe it's that newspapers, with their once- or twice-a-day publishing schedule, can provide significantly more analysis than the "headline news" format of the 24-hour news cycle. Major newspapers like the New York Times, Tribune's (NYSE:TRB) Chicago Tribune, and Dow Jones' (NYSE:DJ) The Wall Street Journal may be suffering, but they're certainly not dying.

Instead, they seem to be adapting quite well to the new electronic world. The trend among news giants seems to be to discard non-core brands, such as television stations, and use the cash to either shore up the balance sheet or make acquisitions elsewhere. New York Times, for instance, recently inked a deal to sell its television properties for $575 million. That's enough to significantly pay down its long-term debt.

With more focused, profitable operations and a possibly lower debt load, "The Old Gray Lady" can certainly take the time she needs to successfully reinvent herself for the new digital era. I wouldn't bet against the publication that prides itself on being "the newspaper of record," even in these challenging times.

Diamond in the rough
Between its solid cash flow, improving balance sheet, and exceptionally strong tradition, New York Times looks like a powerful property dragged down by general grief in the industry. Don't just take my word for it. The Times' archrival paper, The New York Post, recently published a piece claiming that Morgan Stanley (NYSE:MS) thinks Times' shares are worth 50% more than they're trading for. If its rival is willing to print that Times is a bargain, then maybe there truly is value in its shares.

However you slice it, the entire newspaper industry is going through significant structural turmoil. That gives income aficionados, like the analysts at our Motley Fool Income Investor newsletter, the opportunity to go bargain-hunting. With its shares way down over the past few years, its business so obviously under assault, yet such a strong brand and solid cash flow to its name, New York Times has already qualified as an Income Investor pick. Its 3% yield is easily covered by operations, paying investors well while they wait for the turnaround to materialize. You rarely get the chance to buy strong brands at discounted prices, but with New York Times, opportunity may well be knocking.

The Duel's not done yet! Go back and read the other arguments, make your own case in Motley Fool CAPS, then vote for the winner.

At the time of publication, Fool contributor and Inside Value team member Chuck Saletta did not own shares of any company mentioned in this article. The Fool has a disclosure policy.