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New York Times for sale?

Kai Ryssdal Nov 30, 2006

KAI RYSSDAL: You might know the name Hank Greenberg from another context a couple of years ago. Greenberg’s the former CEO of AIG, the big insurance company. He left after an investigation into the company’s accounting practices. He’s in the news again today. There are reports — denied by Greenberg, it should be said — that he’s interested in buying The New York Times Company. BusinessWeek magazine’s got another take on the paper’s fortunes today. That publisher and the head of the family that controls the company, Arthur Sulzberger, is toying with the idea of taking it private. Tom Lowry wrote the story. Tom, thanks for being with us.

TOM LOWRY: Thanks.

RYSSDAL: Let’s talk for a minute about The New York Times as a business, not as a paper. As a business, it’s seen better days.

LOWRY: Absolutely. Like all newspapers, The Times has suffered in recent years as more and more ad dollars have moved onto the Internet and readership has declined.

RYSSDAL: And investors, particularly some of the big ones — Morgan Stanley, the big investment bank, holds a lot of New York Times Company stock; and the news this morning about Hank Greenberg possibly being interested. They’re putting some pressure on the Sulzberger family.

LOWRY: Absolutely. The Sulzberger family is definitely under fire from the shareholders. But yet, the family does control the company through a separate class of stock.

RYSSDAL: Talk to me for a second about that second class of stock? Why is that separate category of stock set up? What does it do for the family and for the company?

LOWRY: Well, you know, it’s fairly common in family-owned media companies to have two classes of stock. It’s convenient in that it prevents takeover bids or . . . they directly control the company. And slso it’s nice to have that dividend that that separate stock provides. And also, allows them to control the editorial product. The Sulzbergers have made no secret that they want to do the best newspaper in the world and they think, in controlling the company the way they have over the years, that’s the way to do it.

RYSSDAL: And we should probably say that there’s no overt sign that the Sulzbergers are talking with anybody seriously about going private, but it’s an option that they’re kinda batting around.

LOWRY: Definitely, and I think that just underscores the pressure that Arthur Sulzberger, who’s the chairman of the company and a descendent of the Sulzberger family, is feeling right now. That he would actually be considering as one of the options that is being presented to him by his financial advisors taking the company private. At this point I just don’t think that that’s immiment. It’s just interesting that they would consider that as one of the possibilities.

RYSSDAL: But a lot of other companies have been taken private in the past couple of weeks and months. I mean, it’s the going thing on Wall Street now.

LOWRY: Absolutely. And I think that’s probably why the family is considering that as one of the options, just because it’s what going on right now. And a lot of the people that do this kind of financial engineering are presenting these as possibilities to the management of media companies.

RYSSDAL: What might it look like, do you think, were The New York Times to go private?

LOWRY: There’d definitely be — if it’s taken over by private equity, and private equity likes to cut costs — I just don’t think you’d have the same editorial product if private equity got its hands on The Times.

RYSSDAL: There is an element of the mainstream media that like to sort of cover itself. How much of this do you think is substantive and how much of this is us being a little bit self-absorbed?

LOWRY: Oh, it’s, you know . . . the media world is definitely self-absorbed. You know, there’s that New York-L.A. axis where you’re constantly, constantly overcovering. And I’m not sure how important any of this sort of minutia is to people who live in the middle of the country.

RYSSDAL: Alright, Tom, thanks a lot. Tom Lowry’s a senior writer with BusinessWeek

LOWRY: Thanks, Kai, appreciate it.

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