............................................................... http://www.nypost.com/business/65119.htm
SEEKS EXPERT HELP WITH SHAREHOLDER REVOLT
By JANET WHITMAN NY POST
April 27, 2006 -- Facing shareholder dissent and getting flak for bloated executive pay deals, The New York Times is frantically searching for crisis p.r. experts as the company gears up for a public battle over the future of the newspaper giant. Exactly what sort of assault The Times might be in for isn't yet clear. Chairman Arthur "Pinch" Sulzberger Jr. and other top management have been criticized for putting off the concerns of Morgan Stanley portfolio manager Hassan Elmasry and for a share price that's plummeted 50 percent since 2002.
Soon after Morgan's attack last week on The Times, the publisher's spokeswoman, Catherine Mathis, was phoning Knight Ridder spokesman Polk Laffoon seeking advice, sources familiar with the matter said.
Knight Ridder, which put itself on the block last year under pressure from unhappy shareholders, used Joele Frank, Wilkinson Brimmer Katcher, a New York p.r. firm with a long list of clients in crisis, at the urging of its investment bankers.
Mathis called Joele Frank, sources said, but the firm wasn't an option because it was already taken - by Morgan Stanley.
Mathis got the recommendation of some rivals, sources said. On the list are Abernathy McGregor, Citigate Sard Verbinnen and Kekst.
Those firms either declined to comment or couldn't be reached for comment.
Mathis declined to comment on The Times' search for outside p.r.
In addition to fallout from the Jayson Blair scandal and Judith Miller's controversial imprisonment, The Times' business has been suffering.
The paper lost nearly 20 percent of its readers in the five boroughs between 2001 and 2004, as it pushed to reinvent itself as a national publication. Its daily circulation in New York City fell to 260,526 copies from 320,682.
Despite the sagging stock performance and job cuts across the company, Sulzberger and CEO Janet Robinson were awarded hefty payouts. Robinson's 2005 restricted stock award jumped nearly fivefold from a year earlier to roughly $2 million.
Sulzberger's stock award nearly doubled to $817,500.
Morgan Stanley's investment arm, a longtime shareholder of The Times with a 5 percent stake, blasted management for the executive compensation and for failing to address the company's woeful stock price. It also called for an end to The Times' two-tier stock system, which it said "fosters a lack of accountability."
Morgan Stanley's Elmasry, taking his first activist stance, went public with his gripes out of frustration, sources said.
He had written a series of letters to Times management over the past year with suggestions on how the company could boost its stock price.
But his attempts to meet with Sulzberger were rebuffed until Elmasry wrote a letter to the entire board, which pushed "Pinch" to meet with the investo>/b>r, sources said.
Elmasry's success might depend on the stance of other large investors, such as Bruce Sherman's Private Capital Management, the firm that forced Knight Ridder to sell itself.
PCM, The Times' largest non-family shareholder with a 14-percent stake, has declined to comment.
But investors are clearly disgruntled, as highlighted by the 28 percent withhold vote for the election of four directors at the company's annual meeting last week.
janet.whitman@nypost.com
"The paper lost nearly 20 percent of its readers in the five boroughs between 2001 and 2004, as it pushed to reinvent itself as a national publication. Its daily circulation in New York City fell to 260,526 copies from 320,682."
Thanks for posting this. It was posted on FR earlier, but I missed this paragraph.
The Slimes circulation in NYC dropped 60,000 or 18.75% in 3 years.
Did they reduce their local ad rates by 18% to the local advertisers?
Where the local advertisers even aware of this lost audience?