Mark Thompson

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4 reasons the New York Times Company won’t be sold anytime soon

New York Times Sales
We learned last week that Michael Bloomberg would like to buy the New York Times Company. He even spoke to Chairman Arthur Sulzberger about it a couple of years ago. So what else is new? Rupert Murdoch covets the Times as well.

The only live question is whether the Sulzberger family would sell.  Through a spokesman Sulzberger said Friday, as he has many times before, that the company was not on the market whatever the offer.

Case closed?  Not quite.  The Wall Street Journal was not for sale until Murdoch’s News Corp. made the Bancroft family an offer — 67 percent above their shares’ trading value — they felt they could not refuse.  Nor did any but the inner circle know the Graham’s Washington Post was for sale until Jeff Bezos bought it in August 2013. Ditto, the Chandler family’s late-1990′s surprise decision to sell Times Mirror to Tribune.

With that one qualifier, I think the Times’ and the Sulzbergers’ situation are so different that a sale anytime soon would be extraordinarily unlikely.

For a seconding expert opinion, I checked by phone with Alex Jones, executive director of the Shorenstein Center at Harvard, and co-author with his late wife, Susan Tifft, of the definitive book on the Times, The Trust.

“If anything has changed, and some members of the family (are willing to sell), I’m not aware of it,” Jones said, “and I think I would be aware of it.”

The structure of the family trust is the heart of the matter, he added.  “It would be almost impossible unless there was unanimity” among family shareholders to sell the company to an outsider.  Even were there a block of dissident family members, Jones said, stock in the Trust would have to be offered first to the other Class B Trust shareholders before it could go to anyone else.

So that’s a big difference.  The Bancrofts were divided on whether to sell in 2007 but those in favor persuaded some holdouts and outvoted others to accept Murdoch’s offer.

Also no Bancroft family members were still working in management.  The opposite is the case at the New York Times Co, where Sulzberger’s cousin Michael Golden is vice chairman.  Spokesperson Eileen Murphy told me that besides Sulzberger’s son, Senior editor for strategy Arthur Gregg Sulzberger, five other cousins of his generation are in management track jobs at the company.

Circumstances were very different at the Washington Post as well.  The newspaper was losing money with fast-declining revenues.  It had become a small part (about 14 percent) of a much larger company with several very profitable divisions.  Chairman and CEO Donald Graham said he could not justify to shareholders carrying the Post, and making big investments in its digital reinvention, at the expense of the rest.

So Graham and his niece, Post publisher Katharine Weymouth, concluded that the paper needed the infusion of capital and new ideas that Amazon tycoon Bezos could provide — “runway” as Bezos later described it.

The Times as a company is practically the reverse.  As a strategic decision, it has sold all other holdings to concentrate on the New York Times, its digital versions and its international extensions.

Public New York Times shareholders know the score, and while the stock has fallen after a rocky third quarter earnings report, it trades up slightly from its value when the Post was sold 18 months ago.

The newsroom buyouts and layoffs late last year were read in some circles as a sign of major trouble. But the impact of a shave of less than 10 percent of the newsroom budget is not a huge event financially for the company.   Further, the Times has indicated a number of those positions will be reallocated to hiring for digital expansions.

With fourth quarter and full-year results due February 3, the company’s prospects as a business are mixed. Through three quarters, it was showing a 1 percent revenue increase and operating at a tiny net loss (though quite profitable on a cash flow basis).

The Times has shifted its revenue balance away from print advertising, booking big increases in circulation revenue with its digital paywall and smaller ones by growing digital advertising.  Its balance sheet is healthy with $300 million more in cash on hand than debt.

Management’s discussion of the third quarter results did indicate slowing in the potential for another wave of circulation revenue growth and a dilemma as the Times experiences  lower revenue per customer as the reader/subscriber base shifts from print to digital and now to mobile.  But those are challenges are way less severe than the company faced in 2009 when it sought a high-interest loan (with options to buy company stock) from Mexican billionaire Carlos Slim Helu.

After the fact of the Dow Jones/Wall Street Journal sale it came out that Dow Jones CEO Rich Zannino, while putting a positive spin on results and strategies publicly, was advising the Bancrofts privately that they would never get a better offer and should take it.

Years down the road, Times CEO Mark Thompson or a successor might make a similar recommendation to Sulzberger, Golden and the rest of the family.  But not now.

Disclosure:  Arthur Gregg Sulzberger is a member of Poynter’s National Advisory Board, and I spoke with him at some length at the group’s annual meeting here earlier this month. He struck me as smart, current, grounded and fully engaged in the next steps in transforming the company.  As his responsibilities increase, all the more reason to think family control is here to stay for the long haul. Read more

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Compensation of NYT execs doesn’t ‘seem to match the company’s current size’

Reuters | Capital

Together, the three top executives at The New York Times — chairman and Publisher Arthur Sulzberger Jr., Times Co. CEO Mark Thompson and Vice Chairman Michael Golden — made $11.9 million in 2013, Jennifer Saba reports. “As a percentage of revenue, Times Co’s compensation is more generous than at six [media] companies and less generous than at three. But as a percentage of free cash flow, it far outranks every company, in many cases by a long way.”

Thompson, left, and Sulzberger in Paris last October. (AP Photo/Remy de la Mauviniere)

Sulzberger and Golden are members of the Ochs-Sulzberger family, which controls Times Co.’s preferred stock (and only those stockholders can vote on executive compensation). “In particular, Golden’s compensation raised questions, given his job as head of the Times Company’s human resources and modest international operations,” Saba writes. The company has posted better financial results since it shed non-core businesses like The Boston Globe and its share of the Red Sox, but “The levels of compensation don’t seem to match the company’s current size,” compensation expert Paul Hodgson tells Saba.

Sulzberger made “roughly $5.3 million” in 2013, down from $6.9 million in 2012, Joe Pompeo reported in March.

C.E.O. Mark Thompson, meanwhile, made $4.6 million in 2013, which was his first full year with the company. Vice chairman Michael Golden made a little under $2 million, while chief financial officer Jim Follo took in $1.8 million and general counsel Kenneth Richieri $1.3 million.

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Vanity Fair: Baquet’s ‘ultimatum of sorts’ led to Abramson ouster

Vanity Fair

New York Times Co. CEO Mark Thompson, Times Publisher Arthur Sulzberger Jr and then Executive Editor Jill Abramson were all “actively recruiting” Guardian U.S. Editor-in-Chief Janine Gibson to a top digital role, Sulzberger says in an interview with Sarah Ellison in Vanity Fair.

Sulzberger calls the events around that hire “the wave.” Dean Baquet, then the newspaper’s managing editor, didn’t know Gibson “was being recruited for a job equal to his own,” she writes. At a lunch, “When Janine told Dean that she’d been offered the job of co-managing editor, he didn’t have a clue,” Sulzberger told Elllison. The story continues:

Baquet reportedly betrayed no irritation during his lunch with Gibson. But two days later, on Wednesday, May 7, he and Sulzberger had dinner. At that dinner, “I learned the severity of his feelings,” Sulzberger said, which I took to mean that Baquet gave Sulzberger an ultimatum of sorts. Baquet himself had earlier been offered a job at Bloomberg News. Now, Sulzberger worried that Baquet might leave. “At that point, we risked losing Dean, and we risked losing more than Dean,” Sulzberger said. “It would have been a flood, and a flood of some of our best digital people.” Sulzberger went into the office the next day and relayed to Abramson that his meeting with Baquet had not gone well. He gave himself 24 hours to make sure he was doing the right thing, he said. Then he offered the executive-editor job to Baquet. On Friday, May 9, he told Abramson it was time to make a change. The announcement was made five days later, on Wednesday, May 14.

Related: Times management “runs for the hills” when asked for specifics about Abramson firing (The Washington Post) Read more

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New York Post puts Jill Abramson on its front page

The New York Post put an Instagram photo by Jill Abramson’s daughter on its front page Friday.

Thursday night Ken Auletta followed his earlier report on Abramson’s firing with an account of the numbers behind a reported compensation dispute between her and The New York Times:

Let’s look at some numbers I’ve been given: As executive editor, Abramson’s starting salary in 2011 was $475,000, compared to [former Executive Editor Bill] Keller’s salary that year, $559,000. Her salary was raised to $503,000, and—only after she protested—was raised again to $525,000. She learned that her salary as managing editor, $398,000, was less than that of the male managing editor for news operations, John Geddes. She also learned that her salary as Washington bureau chief, from 2000 to 2003, was a hundred thousand dollars less than that of her successor in that position, Phil Taubman. (Murphy would say only that Abramson’s compensation was “broadly comparable” to that of Taubman and Geddes.)

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Mark Thompson: Keeping Nate Silver at NYT was not ‘an overwhelming priority’

New York

Joe Hagan’s look at New York Times Co. CEO Mark Thompson’s tenure so far contains many, many tweetable and chewable moments for New York Times obsessives — his presence in the newsroom “was like a belch in a cathedral nave,” for instance, and Sam Sifton was moved from the national desk to create an online magazine “inspired by the corporate consulting firm McKinsey & Co.”

But perhaps the most intriguing nugget is that Nate Silver decided to leave the Times “because he felt it was Thompson who had not committed to building his franchise.”

For [Executive Editor Jill] Abramson, Silver was a tentpole attraction for her favorite subject, national politics, and brought the kind of buzz she thought valuable. In an interview, Thompson confirmed that keeping Silver was not at the top of his agenda: “I would not say it was an overwhelming priority,” he says. “During the election period, he was obviously a very significant figure. Off-season, it’s a slightly different story.”

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Media CEOs ‘hopeful’ about digital subscription growth

Associated Press | Folha de S. Paulo

At the American Society of News Editors convention in Washington, D.C., Associated Press reporter Martin Crutsinger listened to various newspaper honchos speak about about whether they’d keep publishing daily editions, especially in light of recent changes at Advance-owned papers that have reduced the frequency of print editions and home delivery.

McClatchy’s CEO Patrick Talamantes, New York Times Co. CEO Mark Thompson and Washington Post Publisher Katharine Weymouth all said they were sticking with daily publication. Gannett CEO and President Gracia Martore “was less certain,” Crutsinger reports. “I can’t predict what is going to exist in five years,” she said.

The executives were bullish on paywalls, Crutsinger writes; McClatchy had “22,000 digital-only subscribers” at the end of the last quarter. He says the CEOs were “hopeful about their future” after seeing digital subscriptions grow.” Read more

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At Columbia Business School Sunday, New York Times Co. President and CEO Mark Thompson spoke to new MBAs about “conventional wisdom and all the apparently excellent advice that flows from it.”

Take my industry. The movies are finished. TV advertising is dead. Exactly what happened to music will happen to TV. Nobody wants news anymore. No one will ever pay for anything on the internet. Not just said, but said widely and widely believed. And – for the most part and within the time horizon which the prophets themselves were suggesting – just plain wrong.

Jeff John Roberts, Paid Content

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NYT company reports 668,000 digital subscribers as of the fourth quarter

The New York Times Co. | The New York Times
Advertising revenue was down and circulation revenue was up at the New York Times company in the fourth quarter of 2012. The company announced its fourth-quarter and full-year earnings Thursday. Its digital businesses are adding customers, with 668,000 paid digital subscribers company-wide.

Paid subscribers to The New York Times and the International Herald Tribune digital subscription packages, e-readers and replica editions totaled approximately 640,000 as of the end of the fourth quarter of 2012, an increase of approximately 13 percent since the end of the third quarter of 2012. Paid digital subscribers to BostonGlobe.com and The Boston Globe’s e-readers and replica editions totaled approximately 28,000 as of the end of the fourth quarter of 2012, up approximately 8 percent since the end of the third quarter of 2012.

Advertising revenue was down 3.1 percent over the same period in the previous year. Circulation revenue was up 16 percent.

The trajectory of both revenue streams means, “The past year marked the first time that circulation revenue surpassed advertising revenue,” the Times reported. “Circulation revenue grew by 10.4 percent, to $952.9 million, mainly from the growth in digital subscriptions and the rise in print circulation prices. Advertising for the year declined 5.9 percent, to $898.1 million.” Read more

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New CEO Mark Thompson ends first week with memo to New York Times staff

At the end of his first week as CEO of The New York Times, Mark Thompson was the subject of yet another story in his new paper about his tenure at the BBC. The latest story revealed that a letter sent in his name detailed sex abuse allegations against former host Jimmy Savile, allegations Thompson denies having known at the time. On Friday, Thompson sent this memo to staff, which does not mention the BBC scandal:

As I finish my first week at The New York Times Company, I would like to thank the many people I’ve already met. As you’d expect, Times employees come across as super-smart and totally committed to maintaining the values and quality that the company and its newspapers have always stood for. But I’ve also been struck by how friendly and welcoming you’ve been to me.

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Mark Thompson says he didn’t see letter about BBC allegations sent on his behalf

The New York Times
Mark Thompson says he was not aware of the details in a letter he authorized threatening London paper The Sunday Times with “defamation proceedings” over an article it was preparing about BBC program “Newsnight”‘s decision to drop an investigation into sex-abuse charges against one of its stars, Jimmy Savile, reports Matthew Purdy.

The letter was prepared in September by a law firm and “included a summary of the alleged abuse, including the allegation that some abuse might have occurred at the BBC,” Purdy writes. It “appears to have been the last in a string of opportunities for Mr. Thompson, while director general, to have gotten a fuller picture of Mr. Savile and the ‘Newsnight’ program,” he writes.

Thompson is now the CEO of the New York Times Co. He declined to comment for the Times’ article, but a former aide told Purdy, “It’s not clear if he was shown it, but he doesn’t remember reading it.” Read more

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