Posted on 01/26/2008 9:41:15 AM PST by Milhous
The New York Times and others are reporting that Alabama-based hedge fund gave notice Friday that it would try to elect directors to The New York Times Company board, the company said.
ping
I just don’t see it. Looking coldly at the numbers, I suppose the ‘brand’ has some value, but they still have to sell advertising to make money. And there are just too many other broadcast and narrowcast advertising venues now competing with newspapers for them to stay viable.
Much advertising goes to television broadcast and newspaper broadcast because of inertia. Sooner or later the advertisers will all move to more efficient delivery systems. It’s inevitable.
As far as this hedge fund, I don’t know what they can be thinking. Perhaps the NY Times company has a funded pension plan that can be looted. I still believe that’s what The Gravedancer (Sam Zell) has in store for the Tribune Co. Sell off what can bring quick cash - The Cubs, land, buildings - and then fold the company and loot the pension money.
Pointless. All Class B (voting) shares are owned by Putz Sulzberger and his family.
It’s amusing to read the Time’s McCain endoresement, where they lament his refusal to walk away from ‘discredited rightwing economic theories’, especially if one has a graph of the Times stock price handy.
Falcone reportedly seeks the seat to “shake things up” as a possible distraction to cover a short bet sneaking in under the radar.
Presumably players know about Avista taking a bath on its long position in fishwrap but:
Fool'd with hope, men favor the deceit - Dryden
When I went into sales twenty years ago, I learned two things very quickly.
1.) Don’t waste time trying to sell something to someone who has no money.
2.) If you can’t sell it, there’s no need in manufacturing it.
http://www.nytimes.com/2008/01/26/business/26times.html?_r=1&ref=media&oref=slogin
January 26, 2008
Hedge Fund Seeks Board Seats at Times Co.
By RICHARD PÉREZ-PEÑA and MICHAEL J. de la MERCED
An Alabama-based hedge fund gave notice Friday that it would try to elect directors to The New York Times Company board, a day after the same hedge fund gave similar notice to another newspaper company, Media General.
The hedge fund, Harbinger Capital Partners, a part of the Harbert Management Corporation, controls less than 5 percent of Times Company stock, a level that would require a declaration to federal regulators. It has accumulated control of more than 18 percent of Media General stock.
Even if it was successful in electing a slate of directors, Harbinger would not be able to take control of the board without an about-face by the controlling family at each company.
At the Times Company, the Sulzberger family owns the great majority of the Class B stock, which elects 9 of the 13 directors. The Bryan family, longtime owners of Media General, holds a similar position. Both families have stated that they do not intend to sell or to abandon the two-class arrangement that preserves their control.
snip
http://www.inrich.com/cva/ric/search.apx.-content-articles-RTD-2008-01-26-0032.html
MG investor fund seeks change
T-D parent vows to fight ‘hostile’ action as group nominates three directors
Saturday, Jan 26, 2008 - 12:08 AM
By JOHN REID BLACKWELL
TIMES-DISPATCH STAFF WRITER
One of the largest shareholders of Richmond-based Media General Inc. has nominated three candidates for election to the company’s nine-member board of directors.
Media General, which owns the Richmond Times-Dispatch, signaled it will fight the election of nominees proposed by Harbinger Capital Partners, a New York-based hedge fund that owns or controls voting rights to 21 percent of the company’s Class A common stock.
“We are frankly puzzled as to what Harbinger hopes to achieve by its hostile actions,” said Marshall N. Morton, Media General’s president and chief executive officer, in a statement. Since disclosing a 9 percent stake in Media General stock last summer, Harbinger has refused to return Media General’s phone calls, he said.
Had Harbinger called, “it would have also learned of the solid commitment to our mission, values and strategies shared by our board of directors and the holders of the vast majority of our Class B stock, who elect 70 percent of that board.”
An executive spokesman for Alabama-based Harbert Management Corp., which manages and invests in Harbinger Capital Partners, declined to comment.
Morton said Harbinger’s directors “would be disruptive to our company” because the firm’s portfolio appears to have a high turnover rate, rotating out of numerous holdings every six to twelve months.
snip
A hedge fund has no chance of turning around The New York Times regardless of who they put in charge.
It’s like insisting on a new captain for the Titanic AFTER the ship hit the iceberg.
Grampa Dave: Thanks for the ping.
abb: I'm still working on those NYT numbers.
All: Allow me to migrate the second Harbinger story and merge it into this thread. This particular Harbinger seems to distress Media General. It seems to indicate a tipping point.
Fund takes on N.Y. Times, Media General boards
...
When it reported lackluster third-quarter results in October, Media General predicted continued softness for classified and retail advertising in the fourth quarter, particularly in its Tampa, Fla., market.
Harbinger's funds seem to have a high portfolio turnover rate, rotating out of numerous holdings every 6 to 12 months, Morton said.
"A board member or members having such a short-term perspective would be disruptive to our company and, in our view, be adverse to the legitimate, long-term interests of all Media General stockholders," Morton said.
Harbert Management Corporation - Harbinger Capital Partners (Distressed/Event - Special Situations)
Our objective is to achieve superior absolute returns by participating primarily in investments involving distressed/high yield debt securities, special situation equities and private loans and notes.
Investment Approach
As of June 1, 2007, Harbinger Capital Partners was managing in excess of $8.7 billion (USD) through two complementary strategies: Harbinger Capital Partners Fund I focuses on restructurings, turnarounds, liquidations, event-driven situations, capital structure arbitrage and short sales of securities and frequently co-invests with Harbinger Capital Partners Special Situations Fund, which focuses on longer term, control oriented and frequently less liquid, distressed investments.
We are disciplined, value investors with an emphasis on intensive credit research. Our focus is on middle market companies that tend to be misunderstood or under-researched by the market. Investment approaches include the following:
...
Short Sale
Sell short securities when a company’s deterioration or industry fundamentals are not reflected in current price.
Although neglecting to specifically mention either NYT or Media General by name Jonathan Weil does a good job of explaining asset impairment that affects newsprint industry fundamentals.
RICHMOND, Va. – Media General, Inc. (NYSE: MEG), said today that it had received a notice from Harbinger Capital Partners Master Fund, a Cayman Islands hedge fund, and an affiliate seeking to nominate three individuals for election to Media General’s Board of Directors at Media General’s Annual Meeting of Shareholders on April 24, 2008.
The Harbinger notice will be forwarded to the Nominating & Governance Committee of the Board of Directors for review.
Marshall N. Morton, president and chief executive officer, said: “We are frankly puzzled as to what Harbinger hopes to achieve by its hostile actions. The Harbinger hedge funds appear to have a high portfolio turnover rate, rotating out of numerous holdings every six to twelve months. A Board member or members having such a short-term perspective would be disruptive to our company and, in our view, be adverse to the legitimate, long-term interests of all Media General stockholders.
“Since Harbinger first disclosed this past summer that it had acquired a 9.1 percent stake in Media General’s public, Class A stock, including last week, when Harbinger disclosed through an amended filing that it had increased its economic interest in that stock to more than 21 percent, we have sought repeatedly to talk with Harbinger and learn what is on their mind. Harbinger, however, has persistently refused to return our calls.
“Had Harbinger chosen to talk to us, it would have learned, if it does not already know, of the many strategic, operational and financial steps we have taken and are taking in response to the challenges facing the newspaper and broadcast industries today and, with respect to Media General in particular, in response to the currently depressed Florida economy. It would have learned of our commitment to create robust long-term growth in all of our media businesses, a commitment distinguished by a strong sense of urgency and determination. More specifically, Harbinger would have learned that we have:
”Harbinger would also have learned that we have dramatically reduced costs in virtually every area of our business and that we’re successfully executing on our plans to sell non-core assets and operations.
“In addition, it would have also learned of the solid commitment to our mission, values and strategies shared by our Board of Directors and the holders of the vast majority of our Class B stock, who elect 70 percent of that Board.
“We expect each of our current Directors elected by our Class A stock to stand for re-election at this year’s Annual Meeting. They are eminently qualified to serve on our Board of Directors and have the experience to move our company forward in a positive fashion.
“We urge Harbinger to reconsider and abandon its ill-advised, hostile, and thoroughly unwarranted course of action,” Mr. Morton said. Forward-Looking Statements
This news release contains forward-looking statements that are subject to various risks and uncertainties and should be understood in the context of the company’s publicly available reports filed with the Securities and Exchange Commission. Media General’s future performance could differ materially from its current expectations.
About Media General
Media General is a multimedia company operating leading newspapers, television stations and online enterprises primarily in the Southeastern United States. The company’s publishing assets include three metropolitan newspapers, The Tampa Tribune, Richmond Times-Dispatch, and Winston-Salem Journal; 22 daily community newspapers in Virginia, North Carolina, Florida, Alabama and South Carolina; and more than 150 weekly newspapers and other publications. The company’s broadcasting assets include 23 network-affiliated television stations that reach more than 32 percent of the television households in the Southeast and nearly 9.5 percent of those in the United States. The company’s interactive media assets include more than 75 online enterprises that are associated with its newspapers and television stations.
Media General will file a proxy statement in connection with its 2008 Annual Meeting of Stockholders. Media General stockholders are strongly encouraged to read the proxy statement and the accompanying white proxy card when they become available, as they will contain important information. Stockholders will be able to obtain this proxy statement, any amendments or supplements to the proxy statement and other documents filed by Media General with the Securities and Exchange Commission for free at the Internet website maintained by the Securities and Exchange Commission at www.sec.gov. Copies of the proxy statement and any amendments and supplements to the proxy statement will also be available for free at Media General’s Internet website at www.mediageneral.com or by writing to Media General, Inc., P.O. Box 85333, Richmond, Virginia 23293. In addition, copies of the proxy materials may be requested by contacting our proxy solicitor, D.F. King & Co. at 800-487-4870 toll-free or by e-mail at info@dfking.com. Information regarding the names, title and security holdings of individuals who are potential participants in the solicitation of proxies of Media General's stockholders is available on Schedule 14A filed by Media General with the Securities and Exchange Commission on January 25, 2008.
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