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Stockholders offer the last, best hope for rescuing NY Times from its controlling family 4/24/07

Posted by Steve Boriss in Dual-class, Graham, Morgan Stanley, NY Times, Stockholders, Sulzberger, Washington Post.
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For the many years when the paper was highly profitable and its stock value solid, public shareholders of the New York Times tolerated the indignity that they owned 99% of the company, but elected only 4 of the 13 Directors — the remaining 9 elected by holders of special, non-publicly traded shares controlled by the founding Sulzberger family. The Sulzbergers claimed this was good for America because it protected their journalistic independence from business pressures. But unfortunately, protecting a paper from “business pressures” also means protecting the paper from the demands of news customers, not such a good idea in a newly competitive news marketplace. That’s why major Times shareholder Morgan Stanley is leading a stockholder revolt to end the dual-class stock structure, and restore those pesky pressures to give news customers what they want. Not surprisingly, the Times’ Sulzbergers have found an ally in the Washington Post-owning Graham family, who are involved in a similar scheme. WaPo CEO Donald Graham laments “if the stock structure were eliminated, a line of buyers eager to purchase the company would form in minutes [that included] private equity firms, high-ego billionaires, international media companies…and lots more.” Maybe that would be bad news for a couple of high-ego families who earned their money the old-fashioned way, by inheriting it. But, it might be great news for Times employees who would like to see the Gray Lady survive.

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