The future of newspapers in a world of Capitalism 2.0

I've blogged a lot about a publicly endowed public-to-private move by the NYT Company in order to save itself.

I just want to clarify something for a Think! reader who wrote to me about this.

Yes, one option is to go the non-profit endowment route.

But another, and one which is part of my thinking, is that pure endowment isn't the only play here.

Let's just consider for a moment that, after the recent financial meltdown, we're going to see new flora and fauna emerging, a bit like after a forest fire.

I think this is likely not just in the case of newspaper companies and their offerings, but also capitalism in general. It's what I call the birth of Capitalism 2.0. (I don't know if anyone else is using that term, but if so I haven't read about it.)

Capitalism 2.0 is a market place for profit-minded investors (yes, capitalists still want an ROI) within which different classes of investors emerge who are willing, for reasons of contributing to the broader base of social capital, to accept reduced, capped or fixed income returns on their investments.

In my scenario of 100 rich Americans/foundations/endowments/whoever stumping up, let's say, $10 million each to achieve this for the NYT Company, they would enable the NYT Company to survive in the short term and flourish in the long term (once the NYT Co. get with the programme of what is actually going on in the media world and what the market wants and come up with some new ideas). But a fully blown not for profit endowment is not what I have in mind.

What I have in mind is an investment class of managed profit expectations where investors are willing to accept, in return for a broader (can we say greater?) good, lower returns on their capital than they can achieve elsewhere.

Capitalism 2.0 will still leave plenty of investment classes for people who are driven purely by greed and profit, but in 25 years time, might we be asking each other at dinner parties whether we're into - to shorthand the idea - social capital class B investments or pure profit motive class A investments? Emerging social trends will determine which class of investment is called A and which class is called B.

This differential between investment classes can be applied to any company or sector you care to mention. Oil companies that are Investment B class or Investment A class for example, the former being one that caps its profit margins at a certain percentage, re-invests that money in alternative non-fossil energies and pays out, yes, a lower dividend.

Given the NYT families who own the voting stock are going to have to swallow considerably lower dividends for some years to come, even if (and it's an if) they survive, might they like to go for this model and at least claim some glory for developing the concept (after me that is)?

We're constantly told what terrifically socially minded and all round great people the family is (a bit like the Bancrofts, ho hum) so let's see them put their money where their mouth is. Sorry kids, some of you are going to have to get real jobs, but you've all got the nice Manhattan brown house/loft apartment/trust fund based on NYT dividends to date, so it's not all bad is it?

As for management and editorial staff, well, sorry too.

You're going to have to take a pay cut.

I would if I were you in this scenario because given the media meltdown, both re, media market B-side and editorial staffing cuts, there's plenty of members of the liberal media elite who would be more than willing and capable of working for a Capitalism 2.0 NYT Co. on a wage platform of, off the top of my head, at least 25% less than you're currently getting paid.

With the $10 million members of the liberal media elite poneying up to get the debt down by around a billion dollars, the company going public-to-private, the resulting drop in debt servicing fees and 25% off the biggest cost base without you losing your job, this could be one hell of an offer.

And we'll all get a chance to see just how liberal you and the Ochs-Sulzbergers really are. Which would be nice wouldn't it?

If you don't like the deal on the table you can always go and set up a blog, because boy, that's the future isn't it (not).

And let's not forget, that with NYT Company stock trading at as low as $6.90 yesterday, your performance related stock options aren't worth a bag of beans anyway, so no big loss on that front.

Naturally investor/employee participation is going to be a big part of the reward of being in Class B investments as an investor or employee, so we may need a few changes of management style. But judging by the mood music I'm hearing, no one would be worrying too much about that.

BTW: if something like this does happen at the NYT Co. I still want that place on the board. And given how much I've made out of the naked short selling of NYT Company stock in the last 24 months, I'm more than happy to put the first 10 mill on the table. Can't do fairer than that ;)

Today's article in the IHT about the Smithsonian (see below) is perhaps relevant in all this, but there are more thoughts beneath it about the future of newspapers in the world of Capitalism 2.0.


At meeting, Smithsonian practices new openness
By Robin Pogrebin
Tuesday, November 18, 2008
WASHINGTON: Fielding questions about its diminished endowment fund, the possibility of charging admission fees and the fate of its fabled yet shuttered Arts and Industries Building, the Smithsonian Institution held the first public board meeting in its 162-year history on Monday as part of its new commitment to openness and accountability. Sitting on the stage of a 565-seat auditorium at the institution's National Museum of Natural History, members of the governing body, or Board of Regents — including members of Congress — took questions from the audience present and online.
The two-hour meeting was a window on public concerns about the Smithsonian's shaky financial state and potentially endangered programs, rather than merely a forum for combative accusations after two tumultuous years in which the institution has been battered by mismanagement scandals. Museumgoers and Smithsonian staff members had the opportunity to ask whatever they wanted about the organization's operations and direction.
Although billed as an open board meeting, the session seemed more like a chance for the regents to hear from the public than for the public to observe the regents at work. Questions ranged from broad issues like the thrust of the Smithsonian's new strategic planning initiative, intended to draft a course of action for the institution's financial future and its programs, to whether a tram might be built at the National Zoo.
There were nonetheless more challenging moments.
"Why did you not all resign?" was the first question, submitted on a card by an audience member. It referred to the Board of Regents' decision to stay on after revelations about the lavish expense-account spending of Lawrence Small, the Smithsonian's former secretary, or chief executive, who resigned in March 2007.
Roger Sant, chairman of the Smithsonian's executive committee, replied that the regents had asked themselves, "Do we resign, or do we roll up our sleeves — and we chose the latter."
The question that drew one of the most emphatic responses from the regents concerned the viability of the Smithsonian's policy of free admission at all of its components, which include 19 museums and galleries, the zoo and 9 research centers. The Smithsonian draws 70 percent of its $1 billion annual budget from the federal government.
One written comment suggested that "the luxury of free admission must be a thing of the past." The audience booed.
Senator Christopher Dodd, Democrat of Connecticut and a Smithsonian regent, called the admission policy "one of the great hallmarks" of the institution.
Calling attention to the Smithsonian's unusual governance structure was the scheduled role of Chief Justice John Roberts Jr., who serves as the Smithsonian's chancellor and traditionally presides over board meetings. At the last minute the chief justice was unable to attend and Sant presided instead. "We've been trying to do some fixing," Sant said upon opening the meeting. "The board views this meeting as an opportunity to directly engage with all of you about the issues facing the Smithsonian."
Many questions were answered by G. Wayne Clough, the former president of the Georgia Institute of Technology, who took over in July as the Smithsonian's secretary.
He faces the task of restoring stability to an institution struggling with a $2.5 billion shortfall, crumbling buildings and a recent legacy of improprieties by leading Smithsonian executives. "We believe the Smithsonian is at a turning point," he said in his opening remarks. "The world is rapidly changing in so many ways."
Like other organizations, the Smithsonian has been seriously affected by the nation's economic downturn; the value of its endowment has dropped 21 percent since June. "Of course we can't predict the future," Clough said, "but we can prepare for it."
He said the Smithsonian had "to find ways to be more self-reliant." The institution raised $135.6 million last year, he said, an improvement on its goal of $115 million.
The developer and philanthropist Eli Broad, who serves as a regent, said the board had become more conservative about its investments.
The organization has also raised $400,000 toward the $1.3 million cost of its strategic planning effort, Clough said. But he said that fund-raising was not enough and that the institution needed to set about attracting a younger and more diverse work force and audience.
Clough said he had established a committee to ensure that executives at the institution — including regents, staff members and contractors — reflected the nation's ethnic diversity. "The Smithsonian is the treasure of America and it represents America," he said. "Therefore its Board of Regents should as well."
Several of the questions dealt with the Smithsonian's neo-Classical 1881 Arts and Industries Building, which has been closed for four years and is listed by the National Trust for Historic Preservation as one of the nation's most endangered places because of its state of disrepair.
Clough said that the cost of repairs had been estimated at about $75 million and that the Smithsonian would conclude a study on its future use in January. One member of the audience suggested setting aside part of the building as an information center for all the institutions on the National Mall.
The Board of Regents plans to hold open meetings at least once a year. The next one is expected in June. Sant said the board might adjust the format in the future.
"We don't have it exactly right," he said. "But at least we're trying to tinker with it."
http://www.iht.com/articles/2008/11/18/arts/18smithsonian.php

If you think all of the above is a load of old bollocks then you'll be cheered by these remarks by Mr. Capitalism 1.0s recent remarks:

Murdoch upbeat about the future of newspapers
By ROHAN SULLIVAN – 2 days ago
SYDNEY, Australia (AP) — Global media magnate Rupert Murdoch says doomsayers who are predicting the Internet will kill off newspapers are "misguided cynics" who fail to grasp that the online world is potentially a huge new market of information-hungry consumers.
Newspaper companies in the United States and elsewhere are facing fundamental changes to their businesses as more people get their news from the Internet and other sources, and advertisers follow the market away from the paper-and-ink format.
Murdoch, the Australian-born chairman and chief executive of News Corp., said in a speech broadcast Sunday titled "The Future of Newspapers: Moving Beyond Dead Trees" that the Internet offered opportunities as well as challenges and that newspapers would always be around in some form or other.
"Too many journalists seem to take a perverse pleasure in ruminating on their pending demise," Murdoch said in a speech, recorded in the United States and relayed nationally by the Australian Broadcasting Corp. It was the latest in an annual ABC series of lectures by a prominent Australian.
"Unlike the doom and gloomers, I believe that newspapers will reach new heights" in the 21st century, Murdoch said.
Murdoch grew a small city newspaper he inherited in 1953 into one of the world's largest media conglomerates that now includes 20th Century Fox, Fox News Channel and Sky Broadcasting, Dow Jones & Co. and the online networking site MySpace.
He said people now were "hungrier for information that ever before" and that papers have an edge over bloggers and other newcomers because they are more trusted by readers.
"Readers want what they've always wanted: a source they can trust," Murdoch said. "That has always been the role of great newspapers in the past. And that role will make newspapers great in the future."
He said newspapers would have to evolve from the physical item to "news brands" that are delivered in a variety of ways and are flexible for readers.
"I like the look and feel of newsprint as much as anyone," he said. "But our real business isn't printing on dead trees. It's giving our readers great journalism and great judgment.
"It's true that in the coming decades, the printed versions of some newspapers will lose circulation. But if papers provide readers with news they can trust, we' ll see gains in circulation — on our Web pages, through our RSS feeds, in e-mails delivering customized news and advertising, to mobile phones," Murdoch said.
"In this coming century, the form of delivery may change, but the potential audience for our content will multiply many times over," he said.
Murdoch cited two of his most prestigious newspapers, The Times of London and The Wall Street Journal, as examples of how newspaper brands can win large online readerships.
But he stressed that even these papers must recognize that online customers will decide what news they want and how they receive it.
"To compete today, you can't offer the old one-size-fits-all approach to news," he said. "The challenge is to use a newspaper's brand while allowing readers to personalize the news for themselves and then deliver it in the ways that they want."
To capitalize on online opportunities, Murdoch said The Wall Street Journal was planning to offer three tiers of content online — free news, a subscriber-level service, and a third "premium service" of reader-customizable "high-end financial news and analysis."
Murdoch was scathing of journalists who predicted the death of newspapers as self-pitying and "misguided cynics who are too busy writing their own obituary to be excited by the opportunity."
"The newspaper, or a very close electronic cousin, will always be around," he said. "It may not be thrown on your front doorstep the way it is today. But the thud it makes as it lands will continue to echo around society and the world."

That's all great Rupert but your share price is hardly crash hot either is it?

On that cheery note, I am taking a break from Think! for at least a week, if not more. Knee operation in hospital and other more pressing matters to deal with. I may or may not be back.

Can I just conclude by telling those people who edit the simply dreadful T magazine that, as reported in their piece on Amsterdam in their recent travel edition, Amsterdam is NOT the capital of Holland; The Hague is the capital of The Netherlands. (I think we can sadly take it as a given that the headline writers weren't thinking from their desks in Manhattan about the various provinces in The Netherlands when they called that one.)

Finally.....CHRISTMAS COMPETITION

I'm running a prize competition for the Think! reader who most accurately predicts the NYT Company share price on 31 December, 2008. It's a good prize and I'll send it out in the first week of January, 2009, as well as announcing the winner (anonymous you may remain if you prefer but your entries to ihtreraders AT gmail.com please - if you want to claim the prize I will need your postal address at some point.)

And please, if you are a reader of this blog, and there seem to be lots of you, particularly in Paris, London, Hong Kong and NY according to my stats, and if you haven't yet voted on the three polls on this blog that close at the end of this year, please take a minute to do so.

By far the biggest readership, as judged by the polls, is IHT subscribers but I have data and ISP addresses which would seem to suggest otherwise.

Time to fess up and vote!

READ AN ALTERNATIVE IHT DAILY NARRATIVE AT
A PLACE IN THE AUVERGNE

LOOKING FOR A CHRISTMAS BOOK GIFT TO BUY?
"Books about cosmopolitan urbanites discovering the joys of country life are two a penny, but this one is worth a second glance. Walthew's vivid description of the moral stress induced by his job as a high-flying executive with the International Herald Tribune newspaper is worth the cover price alone…. Highly recommended." The Oxford Times

Amazon.co.uk
A PLACE IN MY COUNTRY
by
Ian Walthew


'I read A Place in My Country with absolute unalloyed delight. A glorious book.'
Jeremy Irons (actor)

‘Ian Walthew was a newspaper executive with a career that took him round the world, who one day did a mad thing. He saw a for-sale sign on a cottage in the Cotswolds, bought it, resigned and moved in. For the first few weeks he just lay on the grass in a daze. Then he started talking to his neighbours and digging into the rich history of this beautiful part of England. Out of his inquiries grew this affecting and inspiring memoir.What sets it apart from others of its ilk is the author’s enviable immunity to cliché and his determination to love his homeland better than he used to. His elegiac account of relearning how to be an Englishman should be required reading for anyone who claims to know or love this country.’ Financial Times


Amazon.com
A PLACE IN MY COUNTRY
By
Ian Walthew


For more reviews visit ianwalthew.com

Business trip to the IHT in Paris or friends and family coming to visit you? Fed up with hotels? Bring the family (sleeps 6) to superb Montmartre apartment - weekend nights free of charge if minimum of 3 work nights booked;. Cable TV; wifi, free phone calls in France (landlines); large DVD and book library; kids toys, books, travel cot and beds; two double bedrooms; all mod cons; half an hour to Neuilly and 12 mins walk from Eurostar. T&E valid invoices.
10% Discount for NYT employees; 15% Discount for IHT Employees

International Herald Tribune
IHT
New York Times
The NYT Company

More companies may go private in new year - could the NYT Company be one of them? And might they have to write down the value of About.com?

I've been blogging with increased regularity now for some time on the very real possibility of the NYT Company going public-to-private.

If you think it's just the rantings of some nutter in the Auvergne, read this.


More companies may go private in new year
By Simon MeadsReuters
Monday, November 17, 2008
LONDON: A dearth of capital provided by banks may drive public companies into the arms of cash-rich private equity firms and could help rekindle the moribund market for public-to-private buyouts.
Private equity companies say there have been some signs of revival in the market, which has been virtually shut for more than a year, as institutional investors seek a way out of companies whose share prices have dropped.
There has been a pickup in business in just the past couple of weeks, with two public-to-private deals going into the due diligence phase, said Andrew Roberts, a private equity partner at the law firm Travers Smith.
A slow drip-feed of liquidity back into the system next year could give more impetus to the market for mergers and acquisitions, Roberts said.
"It's still going to be relatively small deals, in the hundreds of millions rather than the billions," he said.
In the first nine months of 2008, there were only 15 public-to-private buyouts in Britain, according to figures from the Center for Management Buyout Research.
The £2 billion, or $3 billion at current exchange rates, buyout of Emap, a media company, was the largest. It was one of only three buyouts worth more than £1 billion.
This contrasts with the 24 public-to-private deals made last year, including the European high-water mark deal - the £11.1 billion takeover of Alliance Boots by a consortium led by Kohlberg Kravis Roberts.
And there is a precedent for a rise in this type of deal after a sharp fall in asset values. Toward the end of the dot-com boom, there were 46 public-to-private deals in 1999 and 42 in 2000, accounting for 28 percent and 39 percent of total buyout deal value, respectively. That total includes other deals between private equity firms and buyouts by privately held companies.
Private equity firms have to put in more of their own money when buying a company with borrowed cash, and the size of such leveraged deals has dropped drastically after the credit crunch slammed the door shut on credit markets.
Private equity firms are hoping tight financing conditions may bring back the heady days. With markets for initial public offerings shut and a mountain of refinancing awaiting already tight corporate debt and loan markets, companies have few options.
"Large shareholders are hugely important in these types of deals," said Roberts, the private equity partner at Travers Smith.
In London, the FTSE 100-share index has slumped by more than a third already this year and large institutional investors are set to dominate shareholder registers as the hedge fund industry shrinks and retail investors continue to stay away.
"Now that prices have come down on the listed market, it will open up the possibility of doing public-to-privates," said Richard Chapman, a partner at the private equity firm ECI Partners. "You also have willing vendors."
"There is a desire by institutional investors to pull out of the smaller and midcap companies."
Sam Hart, an analyst with the brokerage firm Charles Stanley, said he believed that investors in any quoted company would be extremely pleased to see interest from private equity firms.
"I'm sure they would look extremely favorably on any approach, and as long as the offers they were making for companies represented a reasonable premium to the current share price, I would have thought they would be quite inclined to accept those offers," he said.
But, Chapman said, although there is room for a pickup in public-to-private buyouts, activity may not restart until 2009, after banks complete reporting 2008 balance sheets and there is an easing of bank debt.
http://www.iht.com/articles/2008/11/17/business/deal.php

And if you think some of my posts about About.com have been off-the-mark (I think the NYT Company overpaid for an out-of-date, distinctly uncool, ageing demographic, behind the Internet curve dot com company) then you might like to check in on this little gem about companies having to write down the value of assets on their books, bought when times were good and money was cheap: http://www.iht.com/articles/2008/11/17/business/deal18.php

Of course, if they are looking at a public-to-private, that wouldn't be such a bad thing would it?

Meanwhile they plan to merge iht.com into www.nytimes.com, effectively wiping value off the balance sheet - given how much they (overpaid) for the IHT when times were good and money was cheap. WaPo must be delighted.

READ AN ALTERNATIVE IHT DAILY NARRATIVE AT
A PLACE IN THE AUVERGNE

LOOKING FOR A CHRISTMAS BOOK GIFT TO BUY?
"Books about cosmopolitan urbanites discovering the joys of country life are two a penny, but this one is worth a second glance. Walthew's vivid description of the moral stress induced by his job as a high-flying executive with the International Herald Tribune newspaper is worth the cover price alone…. Highly recommended." The Oxford Times

Amazon.co.uk
A PLACE IN MY COUNTRY
by
Ian Walthew


'I read A Place in My Country with absolute unalloyed delight. A glorious book.'
Jeremy Irons (actor)

‘Ian Walthew was a newspaper executive with a career that took him round the world, who one day did a mad thing. He saw a for-sale sign on a cottage in the Cotswolds, bought it, resigned and moved in. For the first few weeks he just lay on the grass in a daze. Then he started talking to his neighbours and digging into the rich history of this beautiful part of England. Out of his inquiries grew this affecting and inspiring memoir.What sets it apart from others of its ilk is the author’s enviable immunity to cliché and his determination to love his homeland better than he used to. His elegiac account of relearning how to be an Englishman should be required reading for anyone who claims to know or love this country.’ Financial Times


Amazon.com

A PLACE IN MY COUNTRY
By
Ian Walthew


For more reviews visit ianwalthew.com

Business trip to the IHT in Paris or friends and family coming to visit you? Fed up with hotels? Bring the family (sleeps 6) to superb Montmartre apartment - weekend nights free of charge if minimum of 3 work nights booked;. Cable TV; wifi, free phone calls in France (landlines); large DVD and book library; kids toys, books, travel cot and beds; two double bedrooms; all mod cons; half an hour to Neuilly and 12 mins walk from Eurostar. T&E valid invoices.

10% Discount for NYT employees; 15% Discount for IHT Employees




International Herald Tribune
IHT
New York Times
The NYT Company

New York Times Company to be bailed out by private investors?

I've been blogging for some time on the very real possibility of the NYT Company taking themselves private as part of some sort of philanthropic bailout by civic minded members of the great and the good of New York. No pressure to make vast profits, worry about shareholders etc.

Interestingly, this tongue in cheek piece from Businessweek, like any satire, has more than a grain of truth behind it.

The money won't come from government, but it may come from a group of very rich, liberal investors.

I wonder if the Family are working the dinner parties and putting out feelers to see if anyone is willing to throw their hat into the ring?




Media Centric November 13, 2008, 5:00PM EST

A Bailout Plan For U.S. Newspapers
A modest proposal for a lobbying campaign to save America's battered dailies
By Jon Fine

TO: Senior executives at U.S. newspaper companies
FROM: Tongue & Cheek Lobbying Innovations LLC
The post-Election Day landscape brings great change for America and its governing philosophy, and this is why we must move quickly to craft a federal bailout for the newspaper industry.
I know from some previous discussions that not all of you agree. Unlike with banks, the collapse of American newspapers does not endanger the world's financial system. Unlike car companies, the newspaper industry does not lose billions of dollars each month. No matter. We can position this as a proactive move to save the only industry prominently mentioned in the Bill of Rights. (Our message team likes that last bit. You'll hear it a lot.) This industry employs over 52,000 journalists, thousands of other workers, and it faces unprecedented challenges. It takes more than a quadrennial sales spike from a closely watched election to save newspapers. Also, the bailout money is there, and—ask any struggling retailer or chain of hair salons soon to claim that they, too, are banks—it won't be there forever.
An Obama Administration will likely show little love for the workaday press, as a simple holler out to your reporters that covered his campaign will confirm. (If you still employ campaign reporters, that is.) But Barack Obama is a civic-minded man. He will appoint civic-minded staffers. They may not love reporters, but they grew up with newspapers. They won't want them to go away, especially since we will paint a news paradigm without papers as being dominated by Fox News and bloggers banging on spittle-flecked laptops.
Decades ago, legislation passed to allow joint operating agreements between competitive local papers, in order to preserve diverse editorial voices. Our mission today will be cast as preserving educational voices.
Two potential Newspaper Rescue Acts:
Debt Relief/Subsidization. The U.S. assumes all outstanding debt at all newspaper companies. At midyear that was $14 billion for the publicly traded players (excluding News Corp., which only owns two U.S. newspapers, but more on them later), $12.5 billion for the Tribune Co., plus more for other private players. The U.S. may take equity stakes in all companies, should the government deem this wise. This plan also includes a onetime sum to offset current revenue shortfalls. Newspapers took in $45 billion from advertising in '07; let's assume ad declines this year and next will total $15 billion. Cost: Around $45 billion.
Industry Digitization. Think of the "license fee" British households pay to the BBC. Government will subsidize Amazon's (AMZN) Kindle (or equivalent device) and mandate that each household purchase one for $50. (Households below the poverty line will get one free.) This plan also provides several billion dollars to develop new digital news products, retrofit or dispose of obsolete assets (like printing presses), and roughly maintain existing newsroom staffs. Government again has the option to secure passive equity stakes. We will stress this plan's "green" aspects. Cost: Approximately $55 billion.
To paraphrase incoming Chief of Staff Rahm Emanuel, never let a crisis go to waste—it allows you to do big things. Tongue & Cheek can guide the lobbying push essential for our mutual success, but we will require the participation of industry leaders who can navigate Washington with finesse and charm. In other words: Sam Zell, please stay home and tend to Tribune. (By the way, Tongue & Cheek has cultivated News Corp. (NWS) executives. Having Rupert Murdoch on board will defang those who howl about liberal media bias.)
Should our proposals fail, we can still shake loose much low-hanging fruit. For starters, a special—and substantial—tax credit for daily newspapers, given our "educational" rebranding. Consumers' subscriptions will win tax-deductible status as well. I'm less certain than some of you that lifting laws preventing newspapers from owning radio or TV stations in the same market will fatten bottom lines. But here, too, a persuasion campaign can reap benefits.
I recognize some may perceive all this as an admission of defeat. But let's feel a sense of opportunity, not shame. And always remember how your business differs from the other supplicants. No newspaper ever bankrupted a country or peddled a product as patently putrid as the Pontiac Aztek.
Fine is BusinessWeek's MediaCentric columnist and Fine On Media blogger .

Meanwhile, how are those stocks doing?

Er, not too good. As of about 20 mintutes ago, here's the story.

New York Times Co
(NYT:NYQ) NYT on other Exchanges
7.49 USD Last
-0.47 -5.90% Change
687.4K Below Average Volume

Data as of November 14, 2008 13:27 exchange time. Market data is delayed by at least 20 minutes

That would be a 20% drop this week, with a low of $7.33 and a low of $7.44 this week. If there's ever a time to do this, it's now.

It's not a strategy for survival, it's not a business plan, even as a non-profit making foundation funded newspaper, but it would buy some much needed time for someone, please someone to come up with some ideas.

This ad recession is going to go into 2010, no doubt about it, and that means 2 years of agencies and clients finding cheaper and cheaper alternatives that work. I don't think there is a lender out there right now with that much patience or risk carefree.

People are talking about GM going bankcrupt. Well, wait till you see the Q4 earnings, then the 2009 Q1 and Q2 and need I go on......

READ AN ALTERNATIVE IHT DAILY NARRATIVE AT
A PLACE IN THE AUVERGNE

LOOKING FOR A CHRISTMAS BOOK GIFT TO BUY?
"Books about cosmopolitan urbanites discovering the joys of country life are two a penny, but this one is worth a second glance. Walthew's vivid description of the moral stress induced by his job as a high-flying executive with the International Herald Tribune newspaper is worth the cover price alone…. Highly recommended." The Oxford Times

Amazon.co.uk



'I read A Place in My Country with absolute unalloyed delight. A glorious book.'
Jeremy Irons (actor)

‘Ian Walthew was a newspaper executive with a career that took him round the world, who one day did a mad thing. He saw a for-sale sign on a cottage in the Cotswolds, bought it, resigned and moved in. For the first few weeks he just lay on the grass in a daze. Then he started talking to his neighbours and digging into the rich history of this beautiful part of England. Out of his inquiries grew this affecting and inspiring memoir.What sets it apart from others of its ilk is the author’s enviable immunity to cliché and his determination to love his homeland better than he used to. His elegiac account of relearning how to be an Englishman should be required reading for anyone who claims to know or love this country.’ Financial Times

Amazon.com

For more reviews visit ianwalthew.com

Business trip to the IHT in Paris or friends and family coming to visit you? Fed up with hotels? Bring the family (sleeps 6) to superb Montmartre apartment - weekend nights free of charge if minimum of 3 work nights booked;. Cable TV; wifi, free phone calls in France (landlines); large DVD and book library; kids toys, books, travel cot and beds; two double bedrooms; all mod cons; half an hour to Neuilly and 12 mins walk from Eurostar. T&E valid invoices.

10% Discount for NYT employees; 15% Discount for IHT Employees



International Herald Tribune
IHT
New York Times
The NYT Company

NYT Company stock now at distressed price: $7.70. What next? Capitalism 2.0's first philanthropic newspaper?

It wasn't so long ago that I was writing that if NYT Company stock fell below $10, that we would be at a tipping point.

As of market close yesterday, NYT Company stock was at $7.70, just 2 cents higher than its lower ever price. I wonder how Mr. Santos and those private investors are feeling now, having seen the value of their investment nearly half in three months. (-43%)

About.com, which I critiqued some time before it was rumoured it would be sold, is no doubt proving to be a tougher sell than expected - basically the NYT Company owns a web site with lots of content but which the younger, more savvy, upscale web generation treat pretty much with disdain. Hard to shift to reduce that debt.

Boston Globe? Who wants to buy that?

And as for the IHT, there seems to be something in the argument that the NYT Company is in fact reducing the value of an asset it holds. They've already given up on www.iht.com with their plans to roll it into www.nytimes.com (hardly an asset value increase move).

My view is, that at these prices, the NYT Company family must be buying shares with a view to taking it private.

My long term prognosis now is leading me to think that unless the NYT Company can reveal a game changing idea or acquisition, the price will continue to be hammered, which leaves the family with the very attractive proposition of taking it private, perhaps with the assistance of some sort of management buyout and/or collection of very rich New York investors more interested in keeping 'their' newspaper alive, seeking modest dividends - or at least prepared to wait out a prolonged zero dividend period whilst debt is reduced.

On the subject of management or employee buyout, let's be honest: stock option packages at the moment aren't looking that thrilling and the job market for staff, B-side or edit, is hardly any better. So as part of this, everyone takes a 15-25% paycut. I can see lots of employees who would be more than happy with that in the current media employment market.

Even the likes of Kristof, Krugman and Dowd might be prepared to swallow it, given their attachment to the value of a free press and their liberal ideologies, and that goes for most of the newsroom.

As for the B-side, the job market is basically dead, so what else are they going to do. Some will go it alone into New Media, some editors too perhaps. But a lot love this institution.

Family says we won't be taking a dividend or a salary -Golden, Sulzberger - and you guys have got to take this as part of the new Sulzberger-Ochs Foundation NYT.

Subscribers may even be asked to put their hands in their pocket for some sort of stock/subscription deal or just a price increase. If you love us so much, pay more, because we're prepared to lose readers and hang on to wealthier ones because our profits are going to be coming crashing down anyway.

In other words, a private sector, philanthropic type bailout.

CSM may be going weekly and web only (and that's a non-profit organisation).

The NYT may become Capitalism 2.0's first philanthropic newspaper - a newspaper working as a genuine public service without all those nasty speculators and investors hassling the family. That gives them time to breathe, pay off the debt, and re-position, re-tool for a new future.

I'd say, if you love the NYT and want it to continue, and have spare cash and don't seek a return on it, start buying.

I'd also say there will be no money any time soon to market the IHT, which, with the end of http://www.iht.com/ makes the end of the IHT and the beginning of the International New York Times highly likely in 2010.

That's not to say that the INYT will become an international version of the NYT, nor that the content or even design (beyond the planned treading water re-design we will see next year) of the IHT will radically change.

Simply, this company can't afford to market two media brands, and one of them globally, in 2009/2010.

So it's fold into INYT - with possible cost reducing move from Paris - or sell brand to vanity publisher e.g an Emirate, based out of one of their media cities?

How much would the Sheiks love to be seen to own a primarily Jewish owned newspaper (in terms of family voting shares) but also be seen to be hands off, democratic media owners?

Frankly, in current market conditions who else is going to buy it? An Icelandic bank?

Dubai here we come, but we'll always have Paris.

There are alternative game changing ideas out there, but I'm sensing a degree of sang-froid cool or complete corporate inertia. This is disonsaurs standing in falling volcanic ash time. Move, adapt, change or die.

New York Times Co
(NYT:NYQ) NYT on other Exchanges
7.70 USD Last
-0.68 -8.11% Change
915.8K Below Average Volume

Data as of November 12, 2008 16:04 exchange time. Market data is delayed by at least 20 minutes.
Today's Open
8.27 USD
Previous Close
8.38 USD
Today's High
8.29 USD
Today's Low
7.68 USD
Today's Volume
915.8K
Avg Volume (10 day)
1.2M

READ AN ALTERNATIVE IHT DAILY NARRATIVE AT
A PLACE IN THE AUVERGNE

LOOKING FOR A CHRISTMAS BOOK GIFT TO BUY?
"Books about cosmopolitan urbanites discovering the joys of country life are two a penny, but this one is worth a second glance. Walthew's vivid description of the moral stress induced by his job as a high-flying executive with the International Herald Tribune newspaper is worth the cover price alone…. Highly recommended." The Oxford Times

Amazon.co.uk

'I read A Place in My Country with absolute unalloyed delight. A glorious book.'
Jeremy Irons (actor)

‘Ian Walthew was a newspaper executive with a career that took him round the world, who one day did a mad thing. He saw a for-sale sign on a cottage in the Cotswolds, bought it, resigned and moved in. For the first few weeks he just lay on the grass in a daze. Then he started talking to his neighbours and digging into the rich history of this beautiful part of England. Out of his inquiries grew this affecting and inspiring memoir.What sets it apart from others of its ilk is the author’s enviable immunity to cliché and his determination to love his homeland better than he used to.

His elegiac account of relearning how to be an Englishman should be required reading for anyone who claims to know or love this country.’

Financial Times

Amazon.com

For more reviews visit ianwalthew.com

Business trip to the IHT in Paris or friends and family coming to visit you? Fed up with hotels? Bring the family (sleeps 6) to superb Montmartre apartment - weekend nights free of charge if minimum of 3 work nights booked;. Cable TV; wifi, free phone calls in France (landlines); large DVD and book library; kids toys, books, travel cot and beds; two double bedrooms; all mod cons; half an hour to Neuilly and 12 mins walk from Eurostar. T&E valid invoices.

10% Discount for NYT employees; 15% Discount for IHT Employees

Controlling Media Holders Face New Scrutiny As Econ Weakens (Dow Jones)

"In general, I'm in favor of one-share-one-vote, but I do make an exception for newspapers, since there's never been a world-class newspaper without a controlling shareholder."

Nell Minow with the Corporate Library, a corporate governance research firm

"The Ochs-Sulzberger family's ownership of, and commitment to, The New York Times has protected the newspaper and its editorial independence through many business cycles," said Catherine Mathis, a spokeswoman for New York Times. "While the current turmoil in our financial markets creates stresses for virtually every business, this commitment remains unchanged."

Catherine Mathis

Controlling Media Holders Face New Scrutiny As Econ Weakens
By Nat Worden Of DOW JONES
NEWSWIRES
The global financial crisis threatens some of the media's elite controlling shareholders after a decade of disappointing investment returns, a rise in investor activism and a chaotic industry transition to the digital age.
Media moguls who rose to prominence while keeping a tight grip on control of their empires have lost some cachet on Wall Street in recent years, as public shareholders increasingly view their family relationships and resistance to change as a barrier to stock performance.
Now, the outbreak of a historic financial meltdown has sparked massive sell-offs in media stocks in expectation of an economic slowdown that could force structural changes to an industry already struggling to adapt to the Internet. This prospect could loosen the grip of controlling shareholders on their family businesses like never before.
"Conflicts of interest aren't felt during good times," said Nell Minow with the Corporate Library, a corporate governance research firm. "But they can be felt strongly in bad times."
Those particularly seeing extra scrutiny are Sumner Redstone, controlling shareholder of Viacom Inc. (VIA) and CBS Corp. (CBS); the Dolan family, owners of Cablevision Systems Corp. (CVC); and the Ochs-Sulzbergers, who control New York Times Co. (NYT). Of those companies, only New York Times would comment for this story.
Already, some legendary media families have faded to the background in recent years, including the Chandlers at Tribune Co., the Ridder family of Knight-Ridder and the Bancrofts of Dow Jones.
The sale of Dow Jones, publisher of this newswire, to News Corp. (NWS) last year exposed some weaknesses of family ownership - the potential for divisions of opinion and, in some cases, neglect. Ironically, Dow Jones was bought by another prominent media family, the Murdochs, whose News Corp. so far largely has escaped shareholder scrutiny, thanks in part to the company's diversification.
News Corp. declined to comment for this story, and a lawyer representing the Bancroft family could not be reached.
Privately controlled and publicly owned companies are common throughout corporate America, but the media industry is rife with such arrangements. Controlling shareholders are perceived to make takeovers harder and reduce corporate influences, giving stability to media companies and a measure of autonomy for content producers from corporate interests.
"In general, I'm in favor of one-share-one-vote, but I do make an exception for newspapers, since there's never been a world-class newspaper without a controlling shareholder," Minnow said. "They do offer protection from market volatility and pressure from advertisers, and shareholders should know what they're getting into when they decide to buy these stocks."
Yesterday's News
For major media conglomerates, though, stock prices generally have made little progress this decade, and in many cases, shareholders have lost significant ground and underperformed major market indices. With the U.S. headed for a consumer-led recession, prospects for a long-awaited turnaround are dwindling, and the business structures of the traditional media, largely protected by controlling shareholders, are becoming suspect.
One such structure exists at Viacom and CBS, both controlled by media mogul Sumner Redstone through his private firm, National Amusements Inc. The arrangement came into focus last week as Redstone was forced to sell $233 million worth of nonvoting stock in the two media conglomerates in order to comply with bank covenants on his firm's $1.6 billion debt load, adding to heavy selling in both stocks.
Redstone's firm said Friday that it is still negotiating on the terms of its debt load as credit markets remain under stress. Meanwhile, the mogul has been feuding with his daughter, Shari, over succession plans, and he recently fielded a lawsuit from his son, Brent.
Shares of Viacom have dropped more than 20% so far this month, leaving the company with less than half the market value it had at the start of 2008. CBS, with its heavy exposure to the weakening ad market, has fared even worse. It's down 40% in October and 67% for the year. Neither stock trades at anywhere near the price where they were valued after Redstone decided to split them into separate entities in early 2006 in hopes of rejuvenating their stock performance.
"At some point, the key institutional investors with a significant interest in Viacom and CBS but no voting control could start to push Redstone to consider new options for these companies," said Porter Bibb, managing partner with MediaTech Capital Partners, an advisory firm focused on the media industry. "They may not be able to vote, but they can buy big stakes in these companies and scream bloody murder if the stock declines continue. Eventually, something has got to give."
Having traded recently at $17.89, Cablevision shares now are trading at just about half the price the Dolans offered to pay shareholders for their stock last fall. Cablevision's shares are off 44% over the last 10 years, while the S&P 500 has broken even over that time. Meanwhile, a number of Wall Street analysts have long said that between its top-performing cable business, its cable networks and its iconic New York real estate holdings like Madison Square Garden and Radio City Music Hall, Cablevision is sitting on a treasure trove of assets undervalued by the market under the company's current structure.
Cablevision, which has little exposure to the advertising market unlike other media companies, has said it's exploring different options to return value to shareholders. It recently announced a regular dividend payment to shareholders.
Harbinger Capital Partners, a hedge fund with a history of shareholder activism, recently accumulated a 9% stake in Cablevision. A spokesman for Harbinger declined to comment for this story. Earlier this year, the firm took seats on the board of directors of New York Times, which is facing a rapid erosion of its advertising revenue, but the publisher's controlling family still holds sway over the board.
"The Ochs-Sulzberger family's ownership


of, and commitment to, The New York Times has protected the newspaper and its editorial independence through many business cycles," said Catherine Mathis, a spokeswoman for New York Times. "While the current turmoil in our financial markets creates stresses for virtually every business, this commitment remains unchanged."
To be sure, not all media families have felt shareholder pressure as intensely. Despite recent stock-price declines, News Corp.'s Murdochs and the Roberts of Comcast Corp. (CMCSA, CMCSK) still have firm control over their companies.
Friday, Murdoch told News Corp. shareholders at their annual meeting that the company's "right balance" of businesses will help it achieve "solid profitability" over the next year in the difficult economic environment. He also said he and his family have no debt outstanding that will affect the company.
Still, shares of News Corp. are trading 20% below where they started 2003 and 7% below where they traded a decade ago. Meanwhile, succession questions about News Corp.'s future after Rupert Murdoch hang over the company, raising another vulnerability of privately controlled companies as a dismal economic outlook for 2009 looms.
"Fiscal 2009 will be a year of many - in some cases unprecedented - challenges," Murdoch said at the meeting. "We cannot fool ourselves into believing otherwise."
-By Nat Worden, Dow Jones Newswires; 201-938-5216; nat.worden@dowjones.com
Corrected october 22, 2008 16:16 ET (20:16 GMT)
(END) Dow Jones Newswires

READ AN ALTERNATIVE IHT DAILY NARRATIVE AT
A PLACE IN THE AUVERGNE

LOOKING FOR A CHRISTMAS PRESENT?

"Books about cosmopolitan urbanites discovering the joys of country life are two a penny, but this one is worth a second glance. Walthew's vivid description of the moral stress induced by his job as a high-flying executive with the International Herald Tribune newspaper is worth the cover price alone…. Highly recommended." The Oxford Times

International Herald Tribune

IHT
New York Times
The NYT Company

Vacation /Business Trip Furnished Rental Apartment in Paris

NYT Company Stock Price

The markets seem to agree with those Q3 results - in line with analysts' expectations.

But I think they are factoring in a sharp drop in the dividend ($25 million alone to family members with $1.2 billion of debt, so the question is, will the family stand firm on this and not do a Bancroft when someone comes tapping on the door).



Name
Last price
1-day$ change
1-day% change
30-day% change
Shares
Totalvalue

New York Times Company NYT: NYSE
$10.70
$0.02
+0.19%
–25.90%

News Corporation NWS.A: NYSE
$9.00
$0.54
+6.38%
–30.02%

Pearson PLC. PSO: NYSE
$9.67
$0.32
+3.42%
–11.53%

READ AN ALTERNATIVE IHT DAILY NARRATIVE AT
A PLACE IN THE AUVERGNE

International Herald Tribune
IHT
New York Times
The NYT Company

Vacation /Business Trip Furnished Rental Apartment in Paris

An interesting week and it began with this: Bleeding ‘Times’ Blood (New York Magazine)

Bleeding ‘Times’ Blood
Which is more important to a 25-year-old Ochs-Sulzberger heir: the sense of honor that comes with owning the New York Times, or enough money to do whatever he wants for the rest of his life?

Dave Golden couldn’t stay at the paper mill forever. It was too tied to the family business, too laden with expectations. So he set off to find himself “in the tango halls of Argentina, on the snow-covered Berkshire border of Vermont and Massachusetts, in the halls of Oxford, in the jungles of Guatemala and even in Asia on a Fulbright,” according to his Website. In the Berkshires, he studied mountain music, and in 2004, the 26-year-old released a well-received folk record, with songs drawing from life experiences, as in “All I Never Wanted”: “I coulda been a CEO, they told me / If I could just stop holdin’ on to this ol’ dream.”
This could be the story of any aspiring artist, but David Adam Ochs Golden isn’t just any folk-rocker carving out his own circuitous path in life. He’s a once and future owner of the New York Times Company, one of the 27 members of the fifth generation of the Ochs-Sulzberger family who will inherit the 157-year-old newspaper as it’s passed down from their forefathers—including Golden’s father, Stephen Arthur Ochs Golden, former president of the paper’s forest-products division and the cousin of Times chairman and publisher Arthur Ochs Sulzberger Jr.
It might seem as if the adventures of a distantly related singer living in New Orleans would have little to do with the fate of the Times, but it was the Dave Goldens of the Bancroft family who agitated to sell their inheritance, The Wall Street Journal, when News Corp. mogul Rupert Murdoch came calling with $5 billion, more than twice the market value of the company. Like the Sulzbergers, the Bancrofts were an ever-expanding tree of cousins and second cousins watching their fortune shrivel in the Internet age.
So it’s fair to wonder, as the Times’ own public editor, Clark Hoyt, did last year, “How united are the Sulzbergers, and what holds them together? Who is the next generation, and how committed are they to the family’s long practice of investing heavily in quality journalism, even in rocky financial times?” It’s a question that’s impossible to answer with any certainty, and one that’s difficult even to address, which is perhaps why Times editor Bill Keller has not followed through on his suggestion in that same column that “this is a story [the Times] could do.”
The Sulzberger family is a different clan from the Bancrofts, who were divided by trust funds and populated with restless socialites and horse enthusiasts whose hobbies required access to substantial funds. From an early age, Sulzberger children are taught to value their role as stewards of the paper and servants to the public good. Privately, however, the family has always quarreled and debated among themselves, with cousins and brothers jockeying for power and influence, and occasional whispers of displeasure with Sulzberger’s leadership. Today there is greater possibility for division in the Sulzberger family than there was a decade ago. In the last ten years, at least seventeen new family members have turned 25, the age at which they are allowed to join the trust’s board or vote for trustees, expanding by 38 percent the number of people with input into the family’s dealings. In 2001, the family trust was quietly amended, expanding the number of family trustees and allowing a less than unanimous vote on “extraordinary corporate transactions”—leaving the door open for a faction of family members to push for a sale.
Will prestige and legacy alone be enough to sustain the next generation? As the financial fortunes of the New York Times wither, the sad truth is that they may not have a choice.

From an estate in Southampton, 82-year-old Arthur Ochs Sulzberger, the patriarch of the family and father of Arthur Jr., has watched as the company he bequeathed to his son has taken a perilous turn. A significant portion of the paper’s troubles can be attributed to the general difficulties of a business model based on print advertising in the Internet age. But the younger Sulzberger’s management stumbles have helped to speed the company stock price’s decline to around $15 a share from $45 at the start of the century.
First, there was Sulzberger’s decision to use the paper’s excess cash flow when it was making money in the nineties to buy back stock—a practice meant to improve investor confidence—instead of acquiring new properties that could have hedged against print losses. In the last decade, the Times bought back $3 billion of its own stock—more than the company’s present market value. Now that money is gone, and the company has sunk from surplus to deficit. (Sulzberger himself has acknowledged that the buybacks were “the stupidest thing” he’s done.)
When the Times did use its cash to acquire new assets, those bets rarely panned out. Believing that television was the medium of the future, Sulzberger overpaid for the Discovery Times Channel, which failed and was sold. All told, the company’s major newspaper and TV acquisitions since 2000 have lost more than $1.5 billion in value. Sulzberger made what appears to be a smart move in acquiring About.com, a highly trafficked information hub, in 2005, but when the Times had a special opportunity to get in on pre-public financing of Google, it passed—perhaps the single worst business decision of Sulzberger’s tenure, says one Times intimate.
Sulzberger hasn’t acted entirely alone. His cousin Michael Golden, vice-chairman of the company and until recently publisher of the beleaguered International Herald Tribune (the acquisition of which cost the company $65 million), oversaw the sale of the old New York Times headquarters on 43rd Street—which the buyer turned around and sold three years later for a $350 million profit (enough to fund the newsroom for more than a year, notes one Times veteran). A new headquarters on Eighth Avenue, designed by architect Renzo Piano and costing the Times about $500 million (roughly 25 percent of the company’s total market capitalization), was also his responsibility and is seen as a sign of the family’s dedication but also its vanity. “Man, he loves that building,” says a former Times executive who knows Golden.
Meanwhile, the company continues to suffer the failed strategic investments of Sulzberger’s father, such as the Boston Globe, which, along with another Times-owned paper, led to an $815 million write-down in 2006. Many at the Times believe Sulzberger Jr. hangs on to the Globe only out of deference to his father.
Smelling weakness, Wall Street agitators have pressured the family to cut costs, squeeze more value out of the stock, and loosen its grip on management. Last year, London-based Morgan Stanley fund manager Hassan Elmasry presented the board of directors with a litany of criticisms of Sulzberger’s management, suggesting that the stock price might be improved with new leadership and an overhaul of the dual-class stock structure that allows the family to maintain monarchal control over the business. Not surprisingly, neither Sulzberger nor the family members on the board were interested in ceding control of the company. In retaliation, an angry Sulzberger pulled the family’s personal holdings, approximately $200 million in New York Times stock, from an account at Morgan Stanley.
In general, Sulzberger and his family have affected indifference to critics. It’s written in the company’s proxy statement that the Ochs-Sulzberger trust reserves the right to put its own aim, to protect the journalistic independence of the paper, ahead of those of the shareholders. Sulzberger views himself as a barrier between the expensive 1,300-person newsroom—the engine of the paper’s reputation as the best newsgathering operation in American media—and Wall Street pressure to save money by laying off editors and reporters.
Nevertheless, Sulzberger partially relented to a shareholder insurgency led by two hedge-fund traders pressuring the paper to cut costs and take more advantage of the Internet. Sulzberger quietly steamed at the most high-profile critic, Scott Galloway, a professor at New York University who runs Firebrand Partners, telling one colleague he “can’t believe this guy’s arrogance.” But eventually he agreed to expand the paper’s board of directors to include appointees chosen by the insurgent traders, including James Kohlberg of the private-investment company Kohlberg, Kravis, Roberts & Co. The move seemed to contradict the “What, me worry?” attitude Sulzberger presents to friends and associates at the paper. “If [Sulzberger] really is that sanguine, why would he let these guys on the board?” asks one Times staffer.
Sulzberger has acknowledged that his own family suffers along with his shareholder critics. “All of us—my family and you, our shareholders—have felt the pain of this disruption,” he said in 2007, referring to the Times’ flagging financial fortunes. People familiar with the family’s trust say it is surprisingly undiversified, with a high proportion in Times stock. The family’s collective and individual shares are valued at a third of what they were worth in the late nineties. One Wall Street executive briefed on the family’s holdings estimated that the central trust is now worth somewhere between $270 million and $300 million. There are individual investment trusts for each line of the family as well—each with inside jokes for names like Trifoos Capital Investors (for the three siblings whose last name is Dryfoos) and Pudding Partners (the Sulzbergers, including Arthur’s sisters). But those too have taken a hit: Late last year, each of the separate family trusts made rare sales of about $500,000 a piece in class-A stock—sales that would have been worth $1.3 million seven years ago.
In order to keep the family—and shareholders—happier in these lean financial times, Sulzberger has quietly ramped up the amount of cash they receive in a quarterly cash dividend. This, more than the sale of stock, is the source of the Ochs-Sulzbergers’ working wealth. Sulzberger and CEO Janet Robinson raised the dividend by an extraordinary 31 percent last year—even as the stock price declined. Of the $132 million a year the paper gives to shareholders, about $25 million of it now goes directly into the coffers of the Ochs-Sulzberger trusts.
But the payoff exacts a harsh price: The company is going deeper into debt to pay the high-yield dividend. In the last four quarters, the paper has made less money than it has paid in dividends, and debt-ratings agencies like Moody’s and Standard & Poor’s are threatening to downgrade the company to “junk bond” status, which would paralyze the paper’s ability to borrow money. In August, an analyst for Moody’s suggested the company could quickly improve its rating by lowering the high-yield dividend—a report that sent the stock down 6 percent. Emile Courtney, a credit analyst for Standard & Poor’s who currently has the Times at the lowest investment grade possible, says that even with changes to its cost structure, “there’s a greater than 50 percent chance that [the Times] will go lower to non-investment grade.” If that happens, the paper will have even less money available to climb out of its hole.

‘My family’s dedication to this company is fundamental and enduring,” Arthur Sulzberger declared during Elmasry’s attack in 2007. Indeed, the Sulzberger family’s dedication to the Times has been the gold standard among newspaper dynasties over the last 30 years. The family is steeped in mythology, down to the name of the family trust, Marujupu, shorthand for the first names of the four children of the late matriarch Iphigene Ochs Sulzberger: Marian, Ruth, Judy, and Punch (in 1929, the explorer Admiral Richard Evelyn Byrd actually named one of the glacial hills in Antarctica after them, Marujupu Peak, not far from Ochs Glacier and Mount Iphigene). After Iphigene died, in 1990, the families of her four children decided to fuse their fortunes together in a trust designed to protect the newspaper. By accepting the deal, they gave up the right to sell off controlling shares in the company, which added up to an estimated $1 billion in potential wealth. But it was worth it to try to preempt the phenomenon that trust-fund managers everywhere know to be true: Families fracture and fight and eventually break up over money.
The four siblings had between them thirteen children, a handful of whom—Arthur Sulzberger, Stephen Golden, Michael Golden, and Dan Cohen—became directly involved in the business. Their identities were built on the paper’s prestige, and their commitment was cultivated by bonding rituals at Hillandale, the family’s onetime 263-acre country estate in Stamford, Connecticut, where copies of the New York Times were placed under benches in the gardens.
At one time or another, each of these cousins thought of himself as a candidate to one day lead the company, each rising through the ranks of his respective department—Stephen Golden in forest products, Dan Cohen in sales, Michael Golden in the magazine division. Arthur Sulzberger was not necessarily the obvious choice to succeed his father. While attending Tufts in the early seventies, Sulzberger did hallucinogenic drugs, worshipped the Grateful Dead, and motorcycled with Dan Cohen. But eventually Sulzberger settled down and started working as a reporter, first at the Raleigh Times and Associated Press, later for the New York Times. He shifted to the business side in 1983, and his father anointed him publisher in 1992, despite some skepticism from the company’s board.
After Sulzberger became publisher, Stephen Golden and Dan Cohen left the company. Golden moved to Tucson to pursue a law degree and work for the rights of Native Americans; Cohen, Sulzberger’s closest family adviser and friend (also one of the company’s largest shareholders), was effectively forced out as senior vice-president of advertising by Janet Robinson, with Sulzberger’s blessing, in part because of complaints about his temperament. Cohen started a TV-production company and later got into the submarine and underwater-exploration business, founding DeepSee, LLC, in 2007. (Netscape co-founder Marc Andreessen, a critic of the Times’ management, archly noted that Cohen’s qualification as a company board member was “noted Jacques Cousteau expert.”) Only Michael Golden remained at the paper. In 2002, after the Times acquired full ownership of the International Herald Tribune, he departed for Paris to serve as that paper’s publisher—a kind of second prize for Golden in lieu of being publisher of the Times.
The other cousins have mainly deferred to Sulzberger, enjoying relatively placid lives as philanthropists, conservationists, and charity-board members. Susan Dryfoos serves as the family historian; Lynn Dolnick was a director of the Smithsonian zoo; Cathy Sulzberger is a real-estate developer; Arthur Golden wrote the best seller Memoirs of a Geisha.
While no one accuses the Sulzbergers of ostentation—“We’re not a family into yachts,” one family member told the trust lawyer, Theodore Wagner—they do live off the family money, residing in Upper East Side townhouses or maintaining country homes that wouldn’t normally be afforded by their day jobs. Beyond that, they are highly invested in their Times identity. “Their raison d’être,” observes one Times veteran who knows several members of the family, “is that they’re members of the Sulzberger family.”
The fifth generation, the sons and daughters of Arthur and his cousins born between 1965 and 1990, have largely remained in the shadows of the company’s affairs, anonymously going about their lives as beneficiaries of its generous dividends, their names listed in the occasional SEC filing detailing the family trust. Like their parents, they’ve led the lives of a prestigious trust-fund family—attending private schools like Dalton and Fieldston and acquiring Ivy League educations at Brown and Columbia, then casting about for noble life pursuits or whatever pleases them.
Sulzberger has said that his clan starts going to family meetings when they’re 10 years old and by 15 they understand their roles as caretakers of the New York Times. There’s also a one-day orientation session for kids turning 18 or 21—or people marrying into the family—to learn about the legacy of the Ochs-Sulzbergers. For the last several years, the entire family has converged annually on the Times headquarters for a review of the company’s fortunes. Afterward, they break into groups and powwow with top Times editorial and business executives. It’s the younger members who ask most of the questions, “more about the mechanics of the paper than debating this or that policy,” says a former Times executive. People who have been involved in those sessions say they’ve never seen family members express criticism or dissent.
“Once the dividend is cut, all hell will break loose,” says a former Tımes executive. “Because that’s what the family lives on.”
Younger members of the family are also inculcated in the beliefs of the Sulzbergers on private annual retreats to places like Hawaii. One Timesman compares the indoctrination to Skull and Bones, but it seems more the stuff of summer camp. They sing songs together like “We Are Family” and keep abreast of each other’s lives through a newsletter called The Lookout. A surprisingly large portion of the family stays connected through the social networking site Facebook, including Punch Sulzberger’s sister Ruth Holmberg, the 87-year-old mother of the Golden brothers, who lives in Tennessee. The Cohen boys compare favorite movies with the Golden kids, who are friends with Arthur’s 26-year-old daughter, Annie.
All this family indoctrination has not produced an obvious heir. “You don’t see a line of people in succession to run the joint,” says a former Times executive. Another person well acquainted with the family says that Sulzberger wouldn’t hesitate to promote a young family member who showed promise. “I don’t think Arthur is an egomaniac. If he saw somebody in there he thought honest to God could be better, he would go to bat in promoting talented young family members.”
As in any family business, the pool of talent in the bloodline is limited, and the bubble of affluence doesn’t always produce heirs with the proverbial fire in the belly. What it does produce, in the case of the Sulzbergers, is a variety of artists, musicians, academics, teachers, and even a fashion stylist. Hays Golden, son of Arthur Golden, is an economist seeking a Ph.D. at the University of Chicago. Ben Dolnick, the 26-year-old son of Lynn Dolnick, Michael Golden’s sister, is a successful fiction writer living in a brownstone secured by his grandmother, Ruth Holmberg. Victoria Dryfoos, daughter of Katie, lives in Martha’s Vineyard and has sought to “promote awareness of … and provide income for Huichol families,” a Native American group in Mexico. (She’s also committed to maintaining the historical integrity of lighthouses, according to a long letter she wrote to a local paper.) Sarah Perpich, David’s 28-year-old sister and Sulzberger’s niece, is a fashion writer, stylist, and personal shopper. “For me, fashion is life, and life is art,” she writes on her blog. Meanwhile, Dan Cohen’s son Alex, a student at NYU, plays drums in a band called the Mysterious Case of Jake Barnes with cousin Dave Golden (making it the unofficial Ochs-Sulzberger house band). He also flexes his editorial muscle on his Facebook page: “Alex Thinks Sarah Palin Can Suck A Dick And Leave Us All Alone.”
Only three fifth-generation offspring have opted for careers at the New York Times so far. The oldest and highest ranking is Michael Greenspon, the 38-year-old son of Jacqueline Hays Dryfoos, a psychotherapist cousin of Sulzberger’s. After stints at the Boston Globe and the Washington Post, where he worked with Graham-family heiress Katharine Weymouth, Greenspon now works in strategic planning at the Times and is described by colleagues as quietly competent but not an obvious candidate to lead the paper. One person at the paper calls him an “odd presence” because he’s so obviously “aligned with Michael [Golden], who he’s very close to.” Two others toil in quieter quarters of the Gray Lady: James Dryfoos, son of Robert Ochs Dryfoos, works as a systems analyst. And Michael Golden’s 29-year-old daughter Rachel is new to the paper, a graduate of the University of Denver who works in digital marketing.
Some Times staffers think the brightest of the young family lights could be David Perpich, son of Arthur’s sister Cathy. A Harvard M.B.A. who helped run a D.J.-training school called Scratch D.J. Academy (it’s still in business), Perpich applied to work at the paper in 2007 after an internship at Times-owned About.com. But he was conflicted over whether to join the Times or pursue a career in consulting. In the end, he decided against the paper and took a job at technology consulting firm Booz Allen Hamilton.
Few doubt that Sulzberger would like to eventually hand the reins of the paper to his 28-year-old son, Arthur Gregg Sulzberger, keeping control of the paper in his father’s family line. In the 1992 book The Girls in the Balcony, which documented a sex-discrimination suit against the Times, author Nan Robertson quotes Sulzberger telling a female executive at the paper, “I want to leave my son a different newspaper from the one I’m inheriting.” (It wasn’t until later that the executive thought to point out that Sulzberger has a daughter as well.)
Annie Sulzberger shows little interest in the Times, pursuing a career in art preservation while “aspiring to be a Daily Show correspondent,” according to her Friendster page (which also features a photo of her and her brother smoking a hookah while watching a Woody Allen film). A college friend from Brown, Dennis Kwan, says Annie was always circumspect about her identity as a Times heiress. “She tried to distance herself from it,” he says. She saw it as a “burden” because “people would talk about it.”
But Arthur III has shown promise as a newspaper reporter at The Oregonian, in Portland, where he recently broke a series of stories about a local sheriff who had an affair. His interest in journalism is no guarantee that he’ll be interested in following in his father’s footsteps, however. One family intimate notes that Arthur III is close to his mother, and his parents’ recent separation might complicate his relationship with his father. “Gail is really hurt,” says a family friend of the deeply acrimonious divorce that has upset the entire family. “She was taken aback by it. She’s going to have a very difficult recovery.” If Arthur III is to be the next Sulzberger to pull the proverbial sword from the stone—and it’s a Camelot metaphor the family employs, with a statuette of a sword-in-stone on Sulzberger Jr.’s desk—it could be an issue, says the family friend.
One thing that would cause the fifth generation to take a sudden interest in the family business is a decrease in trust income. “Once that dividend is cut, then all hell will break loose,” says a former Times executive. “Because that’s what the family lives on. Then it’s over. It’s going to unravel. They’re going to be forced to look for external professional management to run that company.” In a brief phone call, Stephen Golden (cousin of Arthur Jr., brother of Michael, father of Dave) cautioned against assuming that the younger relatives’ interests and careers away from the newspaper mean that they aren’t engaged with its plight. “If you follow that through, what you end up with is an assumption, you say that everyone who is not engaged in the paper is unconcerned. That’s a dangerous assumption.”
Indeed, some of the family’s recent moves make it seem as if Sulzberger’s cousins and second-cousins are not as passive as has long been thought. Just as Sulzberger’s marriage was unraveling earlier this year (a matter of family discussion for at least six months before it became public), Michael Golden, the only other cousin in a position to run the company, returned to New York from Paris. While they maintain a cordial relationship, Golden is more conservative and mild-mannered than his prickly cousin, who sometimes criticizes Golden in front of surprised staffers, according to a person who has witnessed it. Golden still maintains the vice-chairman title and ostensibly oversees international operations but is, according to a person who knows him, “fishing for something to do” while he sits in an office down the hall from Sulzberger. Meanwhile, Dan Cohen, Sulzberger’s closest confidant, has also returned to influence after a period of relative remove, taking a seat on the company’s board of directors in 2007—at the peak of the Morgan Stanley battle.
Significantly, the board of trustees also includes for the first time a member of the fifth generation, Carolyn Greenspon, a 40-year-old social worker who lives in Massachusetts. Greenspon replaced her mother, Jacqueline Hays Dryfoos, on the trust board and recently began attending family wealth-management conferences. Carolyn also happens to be the sister of Michael Greenspon, making the siblings a significant family presence at the paper.
So far, no one has been so bold as to openly question Sulzberger’s management, but it’s worth noting that it was a 42-year-old member of the Bancroft family, Elisabeth Goth Chelberg, who became a key agitator for selling The Wall Street Journal to Rupert Murdoch. After her mother died, she came to see with cold clarity the withering value of her inheritance. “On the one hand it is quite sad,” she told a newspaper, “but on the other it was the only reasonable thing to do.” Says a Times staffer who knows Sulzberger, “It seems completely reasonable that somewhere embedded in this [Sulzberger] family is someone saying the same thing Elisabeth is saying: ‘What the fuck is going on with my investment, Uncle Arthur?’ ”

The idea of the New York Times slipping from family control is one that few inside or outside the family relish talking about. People who know the Sulzbergers are inclined to protect them, seeing the paper as an endangered species on which freedom of the press depends. As former Times editor Abe Rosenthal used to say, one can’t imagine a world without the Times.
It is significant that none of the members of the fifth generation of the Sulzberger family, given the chance, chose to express even a sliver of unhappiness with the company’s management. The reaction is very different from that of the fifth generation of Bancrofts, many of whom were happy to stoke conversations about a sale of the Journal in the press.
The main difference between the two families is that the Bancrofts became disengaged from running the Journal much earlier in the paper’s history; the last family member to hold a senior management role at the company was Hugh Bancroft, who committed suicide in 1933. The Ochs-Sulzbergers’ continued involvement has helped to create a mythology around the paper and the family, a sense of noblesse oblige that may be more powerful than the financial pressures. The family’s dedication to journalism is “a noble, familial thing that courses through their veins,” says a family friend. “And anyone who strays from that gets slapped down pretty quickly.” A sale could make the Sulzberger descendents wealthier, but what they would lose is invaluable to them.
It’s a relatively modern phenomenon for the Times to think of itself as a business more than a civic gesture—an expensive project for the public good. It wasn’t until the nineties, when Sulzberger successfully took the paper national and invested in early Internet ventures, that the stock price spiked and it seemed that the Times might be able to be both virtuous and rich. Today, of course, nothing escapes the pressures of Wall Street, and the tension between the Times’ public trust and the Times’ business is sharper than it’s ever been.
Fantasies about a white-knight businessman who might “save” the Times with a cash infusion abound in the newsroom and in media circles across the city. Most of them feature Michael Bloomberg, who has denied interest in buying the paper, or Carlos Slim Helú, the Mexican telecommunications billionaire who bought $127 million in Times stock. Another notion floated in the newsroom is the hiring of a future-forward CEO, like Google’s Eric Schmidt, an executive who clearly “gets” the Internet and might just be able to reengineer the Times to profit from it.
But for all of Sulzberger’s faults, there’s a simple reason the family hasn’t pushed for new management: No one seems to really have a better idea. “I’m sure they would all be interested, from Arthur down, in anybody giving them a better idea on how to run the business more profitably,” says Max Frankel, the former executive editor of the Times. But there is no magic bullet to save the paper. All Sulzberger can do is try to safeguard the paper’s editorial quality—not just because he believes in it, which he clearly does, but because it protects him from the family constituency. “The quality of the paper,” notes an Ochs-Sulzberger friend, “is the one reason for the family to put up with the financial part.”
And so the Times’ royal family presides over an embattled kingdom—its coffers dwindling, but its titles still a source of pride. Sulzberger seems willing to sacrifice anything to hold on to the family business. “If the New York Times of the future is a Web business, but worth 20 percent of what it’s worth now, he’ll be happy because he’ll have saved the institution,” says a friend of Sulzberger’s who admires him. “That’s what he cares about.” He’s betting the rest of the family agrees.

http://nymag.com/news/media/51015/

READ AN ALTERNATIVE IHT DAILY NARRATIVE AT
A PLACE IN THE AUVERGNE

International Herald Tribune
IHT
New York Times
NYT
Vacation /Business Trip Furnished Rental Apartment in Paris