| Tired of having the Sulzbergers destroy his stock value. |
A major shareholder of The New York Times Co. has stepped up efforts to weaken the control of the company by the Sulzberger family, arguing that the corporate structure doesn't fairly represent the interests of other investors.
“ The value of Times Co. stock has fallen by more than half from its 2002 peak.
The company's difficulties have helped lead a local group to consider making a bid to buy the Boston Globe, which has underperformed other units of the Times Co. The group is led by Jack Welch, former General Electric Co. chairman, and Jack Connors, cofounder of the advertising firm Hill Holliday. ” |
Such family control is common at several other major media companies and was established in part to shield news organizations from financial pressures. But Times Co., which owns The Boston Globe, and its peers are struggling because of the Internet. The inability to meet Wall Street expectations has led to several sales and breakups within the industry
In a report commissioned by Morgan Stanley Investment Management and recently delivered to Times Co. directors, Stephen Davis , a financial columnist and principal of Davis Global Advisors Inc., sharply criticizes the structure that gives control to the Sulzberger family trust. This structure has led to ineffective governance, poor financial performance, and a lack of accountability by Times Co. management, the report said.
The exchange of letters, first reported in yesterday's New York Times, is the latest development in Elmasry's campaign to eliminate the special class of shares that maintain the Sulzberger family's control. It comes at a time when the newspaper industry struggles with shrinking revenues and profits as readership moves online, and faces new competitors, such as Google Inc.
The value of Times Co. stock has fallen by more than half from its 2002 peak, and the company's difficulties have helped lead a local group to consider making a bid to buy the Globe, which has underperformed other units of the Times Co. The group is led by Jack Welch, former General Electric Co. chairman, and Jack Connors, cofounder of the advertising firm Hill Holliday. They couldn't be reached yesterday. |