Can the New York Times Co. Turn Itself Around?

On Tuesday, the New York Times Co. (NYT) held its annual shareholder meeting at its sleek new modern headquarters in midtown Manhattan on Tuesday.

With shareholders concerned about the company's disappointing earnings miss announced last week, company chairman Arthur Sulzberger Jr. kicked off the meeting with an impassioned speech -- trying to convince shareholders that the company is becoming as sleek and modern as the wood, steel, glass and tangerine-colored walls they'd passed through to hear his remarks. (This my analysis, not Sulzberger's.)

Sulzberger started off by dispelling rumors that the company could be bought or taken private, insisting that the company "is not for sale" and that it will continue operating in its current structure for the unforeseeable future.

He attributed the company's recent shortfall partly to the economic downturn and industry-wide pressures, but he insisted that beneath all those negative numbers the company is adapting and changing far better than it appears.

Sulzberger whipped out all sorts of numbers illustrating the company's online growth, laying out a strategy for cutting costs while increasing the company's products, like the "T" style magazine, which always seems to be the go-to example of a new venture that's snagging ad dollars.

One big issue on Tuesday's meeting agenda: electing two new board members who represent the two hedge funds, Harbinger Capital and Firebrand Partners, which now own 20 percent of the company's shares. The company leadership's decision to support two of their representatives for the board is part of a compromise to end a proxy battle waged by the hedge fund folks.

Can the New York Times Co. turn itself around? The shareholders I spoke to en route to the meeting were optimistic that this new blood on the board would impose a new discipline, perhaps pushing the company to sell its less-profitable papers and non-core divisions.

I was in an on-air debate along with our Dennis Kneale and Vanity Fair's Michael Wolff, with Wolff arguing that the publishing industry is dead. While the business is certainly challenged and changing, I have to disagree with him on one key point: companies like the Times are big content creators, and while the monetization model may change, the business of producing content will remain key.

Comments

[DeaverB]

Sulzberger must abandon side talking in politics first and foremost. That is what has led to most of the subscription cancelations I know about, including my own. NYT used to be the "Paper of Record," no more. They keep trying to hide the elephant in the living room--impossible.

[Mike Kelley]

Why should any thoughtful American care about an outfit that publishes secrets about our military during a war? I hope they leave Sulzberger at the helm until the "gray lady" goes under.