The Times is facing pressures both within and without in the run-up to its annual shareholder meeting April 22, reporter Richard Perez-Pena outlined in Monday's "New Challenge to Times Board: Dissidents With Large Stake [1]."
Times executives refused to talk to their own reporter about the challenge from a group of dissatisfied shareholders of the NYT Co., who see "The Boston Globe and a group of 15 local papers as a drain on the company." The renegades favor selling such assets and using the proceeds to be more aggressive in acquiring Internet companies.
Since late December, two hedge funds working together, Harbinger Capital Partners and Firebrand Partners, have amassed just over 19 percent of the common shares, giving them much more leverage than the leading dissident investor last year, Morgan Stanley Investment Management, which had 7.2 percent.
Unlike Morgan Stanley, Harbinger and Firebrand do not say that they want to eliminate the two-tier share structure that allows Arthur Sulzberger Jr., the chairman and publisher, and his family to control the company.
But they do want to elect board members who are not hand-picked by, and beholden to, the current management, led by Mr. Sulzberger and Janet L. Robinson, the chief executive. (Mr. Sulzberger and Ms. Robinson declined to be interviewed for this article.)
Perez-Pena pointed the finger at the newspaper industry as a whole:
But the challenge provokes a larger question: What can the Times Company do to battle the industrywide downturn that has brought sharply reduced budgets, smaller newsrooms and the sale of newspapers across the country?
The company contends it has a strategy that is already paying off: deepen the news Web sites that already draw some of the heaviest traffic and advertising on the Internet, introduce glossy magazines that attract high-end advertisers, and shop judiciously for Internet acquisitions.
One by one, many of the old newspaper families - the Chandlers who controlled Times Mirror, the Ridders of Knight Ridder and, most recently, the Bancroft family off Dow Jones - have given up their companies, either through consolidation or outright sales. That leaves The Times as the largest paper in the country still controlled by a family that sees ownership as a public trust.
The industry endured one of the worst revenue declines on record in 2007, and 2008 is off to an even worse start. The Times Company recently reported that advertising revenue in January fell 9.8 percent from January 2007. The Times newspaper, a longtime holdout against downsizing, recently announced plans to reduce its news department of 1,332 people by 100 positions.