Wednesday, 23 January 2008

Might Google buy the NYT?

Now, the writer behind this piece admits that:

I am told by smart people who know the business that the Sulzbergers will never sell; that their identity is the New York Times. It's also said that they take their role as stewards of journalistic "excellence" and "integrity" seriously. They're plenty rich as it is, if not as rich as they once were, so it's not about the money. It's about the Statue of Liberty and justice and righteousness, all of which they feel The New York Times embodies. And I believe that they believe all that.

But anyone interested in the International Herald Tribune just has to read John Ellis' piece yesterday at Real Clear Markets.

Here's a few openers:

In the last five years, the New York Times has declined in value by an astonishing 70 percent. There is no indication that things will get better any time soon. Indeed, as the specter of recession looms, there is every reason to believe that things will get worse. At some point here in the near future, the market capitalization of the New York Times will fall below $2 billion. At that point, a psychological floor will have collapsed and the company will be in play.
The company that has the most to gain from buying the New York Times is Google. If it proffered a Murdoch-like, no-auction bid of $4 billion, wouldn't the Sulzberger family have to accept it? Every single class B shareholder would accept the offer. It's their only exit. It is also likely that Times employees and retirees would enthusiastically support the deal; it's their only exit as well. So it would all come down to whether the Sulzberger family (smaller in number and not as far-flung as the fractious Bancroft clan that owned Dow Jones) would accept the deal.

The choice for the family would be basically this: double your money or double down on "young Arthur," as the NYT's Chairman and CEO is sometimes called. In the back of their minds, the prospect of doubling down on "young Arthur" could only mean that the company's stock will continue its relentless decline. The prospect of doubling up with Google offers realized value, a global platform and thus a much clearer path to future growth. Everyone would be a lot richer than they are now. Assuming a cash/stock transaction, some might be a whole lot richer in the future.

I've seen "young Arthur's" braces and to me, he looks like a man who would take the money. As for Golden, well, he could go back to being a full time potter.

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