TBO.com - TBO is Tampa Bay Online

Investors Seek Directors' Seats On New York Times Board

ADVERTISEMENT

By SETH SUTEL, The Associated Press

Published: January 29, 2008

NEW YORK - A pair of investors disclosed plans Monday to name their own slate of four directors at The New York Times Co., saying the current board hasn't acted aggressively enough to meet the demands of the rapidly changing media industry.

The investors, Firebrand Partners and Harbinger Capital Partners, laid out their position in a letter to Times Chairman Arthur Sulzberger Jr. and CEO Janet Robinson. The letter, dated Sunday, was disclosed in a regulatory filing Monday.

The Times said Friday that Harbinger had notified the company of its intention to name four directors for election at its annual meeting on April 22. Firebrand indicated it was working with Harbinger and together the two companies owned 4.9 percent of Times stock.

Investors pushed the Times' shares up $1.41, or 9.6 percent, to $16.07 on Monday on optimism about possible changes.

However, Goldman Sachs publishing analyst Peter Appert, in a note to investors, said he was maintaining his longstanding "sell" rating on the stock as advertising moves to the Internet and other media.

"We do not see an easy or quick fix to what ails the company (and industry), other than continued investment to drive a migration of revenues and earnings to Internet-based operations," Appert said. "It is not clear to us what Harbinger and Firebrand bring to the table to address this challenge."

Harbinger had also disclosed on Friday that it intends to name directors at another newspaper company, Richmond, Va.-based Media General, parent company of The Tampa Tribune, TBO.com and WFLA, Channel 8.

Both companies are controlled by families that hold supervoting stock, but in both cases the investors are seeking to nominate directors that are elected by non-family shareholders.

Firebrand Partners' founder Scott Galloway said in his letter that he and Harbinger had no intention of changing the Times' two-class share structure, which allows the Sulzberger family to maintain control of the company.

But Galloway added that the current board, "while impressive in stature, has not been effective in inspiring the requisite bold action this media environment demands."

Galloway said in his letter that he wanted to meet with Times managers to discuss an "optimal capital structure" for the company and to find a way to transform the Times "from a low growth company to a robust firm that is both the newspaper of record and the most trusted starting point on the Internet."

The Sulzberger family holds supervoting stock allowing them to elect nine of the company's thirteen directors. Galloway and his partners are seeking to name nominees for the other four directors, which are elected by holders of the company's publicly traded shares.

In October, Morgan Stanley fund manager Hassan Elmasry abandoned a two-year campaign to get the company to change its two-class share structure. That can only be done by the Sulzberger family, which has indicated no intention of doing so.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT