Posted on 04/24/2007 3:01:03 AM PDT by abb
The New York Times Company annual shareholder meeting traditionally has been a tame affair, where the Sulzberger family, which owns a controlling interest in the company, applauds the achievements of its journalists and, in turn, basks in the applause of investors.
But times have changed. With the company’s stock performance lagging, along with much of the newspaper industry, the chairman and publisher, Arthur Sulzberger Jr., and his family are bracing for a contentious meeting today.
Last year, dissident investors, led by Hassan Elmasry, a senior portfolio manager at Morgan Stanley Investment Management, withheld 30 percent of their votes for the election of Class A directors, as a sign of their frustration with the company’s dual ownership structure and performance.
This year, the company and its critics have both lobbied hard. According to people who have spoken with Mr. Sulzberger, the family and the company are prepared for the possibility that the vote withheld might exceed 50 percent.
The vote is largely symbolic: under the dual ownership structure, the family owns 89 percent of Class B shares and elects 70 percent of the board, or 9 of 13 directors. But such an outcome could put additional pressure on family members and independent directors to take more aggressive steps in addressing the dissidents’ concerns.
So far none of the nonfamily directors of the Times Company have stepped down since the battle began and they have told Mr. Sulzberger that they have no plans to resign. Still, the uncomfortable glare of public scrutiny upon them is not expected to diminish soon.
Mr. Sulzberger has said repeatedly that the company would not change the longstanding dual class structure that gives the family control, maintaining that it preserves the independence of the newspaper and protects the company in dire economic times.
snip
(Excerpt) Read more at nytimes.com ...
"There was a land of Publishers and Editors called the Newspaper Business... Here in this pretty world Journalism took its last bow... Here was the last ever to be seen of Reporters and their Enablers, of Anonymous Sources and of Stringers... Look for it only in books, for it is no more than a dream remembered. A Civilization Gone With the Wind..."
With apologies to Margaret Mitchell...
Ping
http://www.latimes.com/business/la-fi-nytimes24apr24,1,5674077.story?coll=la-headlines-business
From the Los Angeles Times
MEDIA
Clash over N.Y. Times a page turner
Dissident investor slams family control but some defend ‘public trust.’
By Thomas S. Mulligan
Times Staff Writer
April 24, 2007
NEW YORK — For New York Times Co., the timing of today’s annual shareholder meeting could have been better.
Investors are deciding whether to withhold proxy votes in protest of the company’s strategic direction and a stock structure that clinches the Ochs-Sulzberger clan’s control of the media company. Fresh in their minds is a quarterly earnings report last week that showed a continuing drop in print advertising revenue and — perhaps more ominously — an unexpected slowdown in the growth of Internet ad sales.
What started nearly two years ago with a critique of the company’s performance by a Morgan Stanley money manager has turned, for some, into a debate about the role of newspapers in American society and whether news media companies whose shares trade publicly ought to be exempt from the usual sink-or-swim rules of Wall Street.
Pressure from unhappy shareholders led to last year’s sale and breakup of Knight Ridder Inc., then the nation’s second-largest newspaper chain. It also factored into the months-long auction of Tribune Co., parent of the Los Angeles Times, which culminated in an April 2 agreement with Chicago financier Sam Zell to take the company private in a buyout involving an employee stock ownership plan.
According to Washington Post Co. Chairman and Chief Executive Donald E. Graham, all that keeps his company from a similar fate — along with New York Times Co., Wall Street Journal parent Dow Jones & Co. and other newspaper publishers — are stock structures that give their controlling families super-voting rights and virtually ironclad sway.
snip
Media
Times Feels The Heat
Louis Hau, 04.24.07, 6:00 AM ET
For the past year, Morgan Stanley Investment Management Managing Director Hassan Elmasry has been vocal about his desire to see big changes in how the New York Times Co. is run.
But amid all the noise over this public spat, one rather important question tends to get lost in the shuffle: Corporate governance issues aside, what exactly does Elmasry think the Times should do differently to grow earnings?
The Ochs-Sulzberger family’s control of nine out of 13 seats on the Times board through its ownership of most of the company’s Class B shares means that Elmasry is doomed to fail in his key demand that the company ditch its dual-class share structure.
But with Times shares worth about half as much as they were five years ago, the company remains vulnerable to charges that a share structure meant to guarantee editorial independence has also provided cover for an ownership group that has failed to maximize shareholder value.
Citing the company’s poor performance and what it views as the Times board’s lack of responsiveness to shareholder concerns, Institutional Shareholder Services, an independent advisory group, recommended earlier this month that shareholders withhold their votes for directors at Tuesday’s annual shareholders meeting.
The company has appeared in recent months to bend to some of the pressure, such as by boosting its quarterly dividend and by agreeing to sell its TV broadcast holdings to Oak Hill Capital Partners for $575 million, a deal expected to close by the end of June. The board even agreed, finally, to meet with Elmasry in February to hear his concerns.
snip
http://biz.yahoo.com/ap/070423/ny_times_shareholders.html?.v=1
N.Y. Times Faces Dissident Shareholders
Monday April 23, 4:25 pm ET
By Seth Sutel, AP Business Writer
New York Times Braces for Friction With Shareholders at Annual Meeting
NEW YORK (AP) — The New York Times Co. could face more blowback from dissident shareholders at its annual meeting Tuesday, led by a Morgan Stanley fund manager who wants the Times to abolish a two-class share structure that allows the Sulzberger family to control the company.
Last year, shareholders representing 30 percent of the company’s publicly held shares withheld their votes for directors, and in recent weeks, two shareholder advisory firms have recommended that investors do the same this year as a way to press for corporate governance changes.
The two firms, Institutional Shareholder Services and Glass Lewis & Co., say the company should institute several changes including separating the roles of chairman and publisher of the Times, both of which are currently held by Arthur Sulzberger Jr.
However, the Times has found support from several quarters in the lead-up to its annual meeting, including a recommendation from a third shareholder advisory firm, Proxy Governance Inc., to vote for the four directors elected by public shareholders.
On Monday, Donald Graham, chairman and chief executive of The Washington Post Co., which has had its own disagreements with the Times in the past, wrote an impassioned defense of the Times and its leadership in an op-ed article in The Wall Street Journal.
In the article, Graham said that the recommendation from the Morgan Stanley money manager to scrap the two-tier share structure would “run crazy risks” with the future of the Times’ most important asset, its flagship newspaper. He warned that loosening family control could cause the Times to be “auctioned off like a side of beef.”
Like the Times, The Washington Post Co. and Dow Jones & Co., which publishes The Wall Street Journal, are controlled by families through special classes of shares that have powerful voting rights.
The Times also received a vote of confidence from Howard Milstein, the chairman of Emigrant Bank, which recently purchased a 4.3 percent stake in the Times.
An Emigrant official declined to comment, but Milstein’s investment is believed to be a friendly one. Catherine Mathis, a spokeswoman for the Times, said, “We’re delighted Mr. Milstein sees potential in the shares of The New York Times Co.”
Hassan Elmasry, a fund manager at Morgan Stanley, has been vocal about his concerns at the Times, saying the two-class share structure fosters a lack of accountability to public shareholders.
Elmasry hasn’t said definitively whether he will again withhold votes on the shares he controls — which are currently worth about 7 percent of the company — and a spokesman for Elmasry declined to comment.
Any withhold votes are likely to be largely symbolic since the Sulzberger family still controls the company and has the right to elect nine of its thirteen directors.
Newspaper ownership has become a hot topic after two major publishers, Knight Ridder Inc. and Tribune Co., were forced into sales following shareholder unrest.
Neither of those companies had dual-class share structures, and now, among the large, publicly held newspaper companies, only industry leader Gannett Co., publisher of USA Today, still has a single class of shares.
In addition to its namesake newspaper, The New York Times Co. also owns The Boston Globe, International Herald Tribune and 15 other daily newspapers, About.com, and two New York City radio stations. It has agreed to sell its nine network-affiliated TV stations.
That makes the directors meeting mainly a matter of potential embarrassment to the family. Lord knows Pinch has it coming.
Pinch & Co. can defy the laws of economics only so long. Even the Soviet version of the Times, Pravda, had to succumb.
The Times was the strongest paper, but the time of print newspapers is fading. They can go on a long time before they crash.
"Mr. Sulzberger has said repeatedly that the company would not change the longstanding dual class structure that gives the family control, maintaining that it preserves the independence of the newspaper and protects the company in dire economic times."
Translation, it keeps anyone from firing my sorry ass.
Didn’t Bernie Goldberg write that the Washingotn bureau of the Times referred to the New York office as, “The Taliban,” and referred to little Sulzberger as, “Mullah Omar?”
Can’t wait for the Class A shareholders to sue the Class B shareholders for misfeasance, malfeasance, incompetence, unjust enrichment, accounting fraud, etc.
Don't recall Bernie saying that, but even if he didn't it's true.
I’ll give them three years.
If the times management and editorial control were sold to the highest bidder, how many days would it be before Saudi Arabia bought it up lock, stock and barrel?
Thanks for the ping, thread. BTTT!
This is just too, too, delicious . . .
The FreeRepublic board could use some good news right about now, if you know what I mean.
I thought these people want inheirance tax? there time is up as owners of the New York Times or are they hypocrites
Text of Pinch’s speech today.
http://online.wsj.com/public/article/SB117741550338280343-Cl85ZKmwgYO8F_lW0HUPX_Lu_lE_20070501.html
Times Executive Speeches
April 24, 2007 7:58 a.m.
Below are the prepared text of speeches that will be given by New York Times Co.’s chairman and its chief executive officer at the 2007 annual meeting of the company’s stockholders.
MR. SULZBERGER:
Good morning. I’m Arthur Sulzberger, Jr., Chairman of The New York Times Company.
Rhonda Brauer, our secretary and corporate governance officer, tells me that we have a quorum and that our Company’s 111th annual meeting is now lawfully convened.
Does anyone in this audience need the aid of a sign language interpreter? If you do, please raise your hand.
One other housekeeping matter: If you plan to vote by ballot, please present yourself to Diane Brayton, senior counsel in our Legal Department. She will confirm your credentials to vote at this meeting, which will expedite the consideration of the proposals that are the business of this meeting later this morning. In order to vote by ballot, you need to confirm your credentials at this time. Of course, if you have submitted your proxy, you need not vote by ballot.
snip
the rest of this article is on the free section of the WSJ today.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.