The Wall Street Journal reports that the New York Times (NYSE:NYT) is considering selling some assets. Well…it’s about time. This move is clearly in response to pressure from hedge funds that are pushing for seats on the company’s board. The funds now own as much stock as the Sulzberger family.
In the media, pressure from hedge funds is often portrayed in a negative light, as if some slick-haired Gordon Gekko types are bullying a lovable family run enterprise. In the case of the New York Times, the funds are the only ones willing to hold the company accountable. The current management has run the company into the ground, and an asset sale should have happened a long time ago. Jack Welch, for example, wanted to buy the Boston Globe, but the Times shot him down. Now, I doubt the Times could sell the Globe even if they wanted to.
Here’s what sclerotic companies like the Times don’t get: Even if shareholders don’t control the board, they still have a vote. They can vote by selling and that’s exactly what has happened. Shares of NYT are basically where they were 12 years ago. How could anyone think that’s serving shareholders well?
There’s also an interesting wrinkle. One of the NYT’s non-core assets is a stake in the Boston Red Sox. You read that right. That’s like Sauron owning a stake in the Hobbit’s favorite pub. Given the Bosox recent World Series wins, I would think that the franchise could go for a nice sum. Speaking of Sauron, maybe Steinbrenner is interested?
The Times could also let go of the IHT and even About.com. Some analysts have floated ideas of the Times being bought out by fill-in-the-blank (Buffett, Google (NASDAQ:GOOG), Bloomberg). Interesting, but I doubt it. Even if a major deal came to pass, it doesn’t avoid the major issue that the Times can’t survive in its present form. It will exist, but I don’t think it will be a New York-focused general news publication. The future lies in smaller, niche pubs.