An Empire In Decline

Don’t miss Thomas Lifson’s incisive analysis of economic decline at the New York Times. The TImes, under the far-left leadership of “Pinch” Sulzberger, has not only gone off the deep end politically, but has also made a series of bad business decisions that have caused the company’s stock to plummet. Lifson writes:

The American Thinker has been warning shareholders in the New York Times Company for at least two years that Pinch Sulzberger’s management team has been dissipating the company’s formidable assets, and driving the company in the wrong direction. Smart investors like Morgan Stanley and other institutions and individuals should have noticed that the company doubled-down on newsprint operations through the expensive purchase of properties like the Boston Globe in negative growth New England, just as the internet was eating away at the newspaper industry, that the company has held onto local television stations as the market values have declined in the face of cable and internet competition, and that the company paid lavishly for its first acquisition in the internet industry.

And if any of the MBAs on Wall Street took the time to tease the underlying data out of the company’s 10-K reports (as Jack Risko and I did), where it was carefully buried, they would find that the core cash cow business, the metropolitan print edition of the New York Times, has been in a steep decline, milked to support the national edition’s growth, which has leveled off and not achieved profitability anything like the declining metro edition.

Morgan Stanley, which owns 28% of the New York Times Company’s equity, has had enough. At the company’s annual meeting last week, Morgan Stanley cast its votes against management’s slate of directors, thereby issuing a public vote of no confidence in Pinch’s leadership. However, even though the Sulzberger family owns only a small portion of the company’s equity, it effectively controls the Board of Directors becaue of the company’s two-class equity structure. (Liberal principles, after all, can only be applied so far!) Thus, matters will have to get even worse before the paper’s current lefty regime is finally overthrown. Whether the result of Pinch’s inevitable downfall is a more centrist newspaper, or just better-managed leftism, remains to be seen.


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