For the first time The New York Times is allowing “outsiders” on its board.
The newcomers will be nominated by a pair of Wall Street hedge funds that have been trying to shake up The Old Gray Lady of American journalism.
The opening up of the board will it is hoped stave off a “proxy fight” that was seen as a serious bid to loosen the control of Times’ chairman Arthur Sulzberger and his family. The two hedge funds, Harbinger Capital Partners and Firebrand Partners have amassed ten per cent of the Times’ common stock, which gives them the largest stake in the company of any non-family shareholders.
It could result in a lot of “internal politics” but whether it will have any effect on the direction of the company is not clear.
A two-class stock structure gives the Sulzberger family complete control of the board. The two hedge funds have said they have no intention of challenging the Sulzbergers, a declaration that was welcomed by the family.
The Times company chairman responded: “Both the board and management welcome the perspectives and insights of our proposed new directors”.
However the hedge funds – because of the declining values of Times stock – have for some time argued that the company should sell many of its assets, including its offices in New York, The Boston Globe, which it owns along with several smaller newspapers, and its minority stake in the Boston Red Sox – and invest more aggressively in internet companies. An increasing number of shareholders appear to support the hedge funds.
Shares in The Times which were once over $50 have since last October traded for between $15 and $20.
This week they traded at just under $19. Like most American newspaper companies, income declined sharply last year and continues to fall.
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