NY Times and Unaccountability

[Annie]

Links at site:

http://www.slate.com/id/2140131/&#twilightpinch

The Twilight of the Sulzbergers? The Class A shareholders are closing in on Pinch. According to TheStreet.com:

Morgan Stanley Investment Management said Tuesday it withheld votes for the [New York] Times' director nominees because it believes the company's board and management have become unaccountable to shareholders.

The firm, which says it owns more than 5% of the Times' Class A stock, called for the elimination of the dual-stock structure that leaves control of the board with minority shareholders led by the founding Sulzberger family [Emph. added]

That seems at least as much of a revolt as six retired generals calling for Rumsfeld's resignation, no? Except that Morgan Stanley is still on active duty. It's a mutiny! ... P.S.: Morgan Stanley noted that "[D]espite significant underperformance, management's total compensation is substantial and has increased considerably over this period." ... 2:08 P.M. link

 

[Annie]

More:

http://www.huffingtonpost.com/arianna-huffington/times-shareholders-the-2_b_19428.html

Times Shareholders: The 28 Percent Uprising (23 comments )
READ MORE: 2006, Judith Miller, Scooter Libby, New York Times

There is a front page, above-the-fold story in the New York Times today buried on page C-3.

Written by Katharine Seelye, it provides more details about the Times shareholders' revolt Mickey Kaus blogged about yesterday. Details that don't bode well for Arthur Sulzberger. Hence the C-3 placement?

According to Seelye, investors holding 28% of the company "withheld their votes for directors at the annual [shareholders'] meeting yesterday, registering their dissatisfaction with how the company is performing" (Morgan Stanley says it was 31%). By comparison, just 1% of shareholders withheld their votes last year.

The only dissenting shareholder to go public was Morgan Stanley, the Times' fourth largest shareholder, with 5.8 percent of the stock. But sources close to shareholders tell me that the mutineers included the Times' top two Class A shareholders: Bruce Sherman, of Private Capital Management, which controls 14.2 percent and T. Rowe Price, the investment house which controls 13.6 percent (Adding together all of Sherman's, Price's and Stanley's shares produces a total of 33.6 percent of the stock. So the Times pegs the percentage of shares withheld at 28%, Morgan Stanley puts it 31%, and my math puts it at 33%. Whatever the exact the total, it's more than a quarter of the company's shares.)

Sherman's no vote of confidence is particularly significant since his dissatisfaction helped force the sale of Knight Ridder last month.

Such an outcome is extremely unlikely at the Times, which has a dual class stock structure that gives the Sulzberger family voting control over nine of the 13 seats on the company board.

But having three of the four biggest shareholders in the company withhold their votes (and one of them publicly question the performance and salaries of top management) must put extraordinary pressure on the family to consider making a change in management - i.e. finally address its Pinch problem.

Besides having to deal with unhappy shareholders, I hear the Sulzberger clan is also getting an earful from friends on the dinner party circuit from New York to Paris (where a possible contender for Sulzberger's job, Michael Golden, is now publisher of the International Herald Tribune). They are troubled by the Times Company's plummeting stock price (down 47 percent since January 2004, 11 points worse than the industry average), the ongoing problems in the Times newsroom, and the ongoing Judy Miller/Scooter Libby embarrassment.

The problems are only exacerbated by the imperiousness of Sulzberger who, sources tell me, waited months before finally deigning to listen to Morgan Stanley's concerns.

The imperiousness appears to be contagious. Seelye's story included this gem: "The Times Company declined to comment on the vote." Stonewalled by your own ownership. What next, two word "No comment" editorials?

The Times' two-tiered stock structure can only insulate the Sulzberger clan up to a point. If the 28 percent uprising becomes a 48 percent revolution, will the Times Company -- and the Sulzberger family -- still be able to remain silent?

 

[Annie]

Odds are for more uprising, the NY Times is NOT doing well:

http://www.americanthinker.com/blog/2007/07/new_york_times_bond_rating_cut.html

July 11, 2007
New York Times bond rating cut again
Thomas Lifson
How much longer will Pinch Sulzberger's family allow him to drive the family fortune into the ground? Under his leadership, the company has not only turned to the hard left editorially, it has committed a series of business blunders imperiling their prosperity.

We reported in March that the company was in danger of having its bond rating cut to just one step above junk bond status. According to this, Standard & Poor's has now made that ratings cut. This will mean that many bond funds will be unable to purchase NYTCo debt,Pinch Sulzberger meaning that the company will have to pay sharply higher interest rates on its borrowings. I have labeled this process the "slow motion business collapse" of the company. And the evidence keeps accumulating justifying this judgment. From its vermin-infested brand new headquarters to its now-unneeded (because so many readers have deserted its metropolitan editions) huge printing plant in New Jersey (Pinch's first bright investment idea), and physically shrinking newspaper, the company blunders along, as clueless managerially as it is editorially.

It must be a terrible thing for family members to see their fortune being devastated by their own relative.