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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.

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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