Hedge Fund Manager Pushing For Changes At New York Times
The print newspaper business has problems--declining ad revenue, transitioning to the digital future. Just look at the stock price of the New York Times over the past year--ouch!
Well now a hedge fund manager--Firebrand Capital's Scott Galloway--who owns a significant stake in NYT stock is pushing to make some changes. He wants a seat on the board and he called for the company to sell some of its non-core assets.
Firebrand and Harbinger, another hedge fund, have a combined 4.9 percent stake in the times, and they want ot put forward their own nominees for four of the company's 13 board seats. Galloway is proposing himself, along with Greg Shove, who used to be a top guy at AOL, James Kohlberg, co-founder of his eponymous private equity firm, and Allen Morgan, who runs the Mayfield VC fund. Looks like a list of Internet-savvy guys who will think of the bottom line above else.
The hedge funds can't put their guys on the Times board until the NYT board meeting in April, but in the meantime Galloway is hoping to affect change with some compelling words. In a letter to Arthur Sulzberger (Times Chairman) and its CEO, he said that the company's brand are at risk, pushing for the sale of the Boston Globe, and a larger digital presence.
Sound familiar? Morgan Stanley's Hassan Elmasry suggested similar changes. But Elmasry, in a proxy fight, pushed the Times to repeal its dual-class share structure. He lost and sold his shares. Galloway says he's not trying to change the share structure. They've got a point--the future is all about the digital footprint.
Speaking of print's transition online, what about the Wall Street Journal's online subscription model? Ever since Rupert Murdoch's NewsCorp took over Dow Jones, the big question has been, will he make the web site free?
After tons of rumors that he'd drop the subscription model, he's decided to keep the subscription service, while expanding the free elements of wsj.com.Why not make it all free? Well wsj.com would need a TON more advertising to justify dropping its millions of subscribers, and with the ad environment what it is--this is not the time.
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