A few days after Jeff Bezos, the Amazon founder, purchased The Washington Post from the Graham Family, Arthur Sulzberger Jr., the fourth-generation publisher and chairman of New York Times , joined his cousin and vice-chairman, Michael Golden, for a conference call with the large and extended Ochs-Sulzberger family.
The topic was the future of family ownership of the country’s best-known newspaper. Sulzberger wanted to get a sense of the family’s mood following news of the Graham sale, a transaction he said sent “a shock through the institution.” That Donald Graham chose to sell the Post turned speculation to The New York Times, the country’s last family-owned major metropolitan newspaper.
Indeed, the Ochs-Sulzberger’s continued ownership of the Times is a subject with no shortage of prognosticators and pretenders. Pundits and investors frequently weigh in on the subject, arguing that declining print advertising revenue combined with the challenges of making money online and the allure of a multibillion-dollar buyout should be enough to convince the family to sell.
“Everybody, as you might recall, said The Times is next, the Times is next,” Sulzberger said on Thursday at an event organized by Media Matters and moderated by Alex Jones, director of the Shorenstein Center on Media, Politics and Public Policy at Harvard University. “Michael and I said we would like to send out a memo and want to sign it from the family. It was amazing, they all said ‘yes, sign-it,’ we are not selling The New York Times.”
“The family is united around its ownership and its responsibility to maintaining The New York Times and its journalistic integrity and its journalistic independence,” he added.
While
the Graham’s sale to Bezos did prompt the family to demonstrate its
commitment to ownership, Sulzberger said the decline in the company’s
stock price from $40.54 at the start of in 2005 to a low of $3.51 in
February 2009 had provoked its own anxieties. The rapid decline in
revenue caused by the 2008 banking implosion and the accelerated
migration away from print advertising compelled the company’s board to
eliminate its quarterly dividend in 2008.
“The family said we
don’t like it, but if this is what we have to do, suck it up,” he
recalled. The dividend was restored in December, five years after it was
completely eliminated.
Since February 2009, New York Times has gained 365%, trading on Thursday at $16.24.
Rather than looking for an exit strategy, Sulzberger said he and Golden are grooming six members of the fifth generation of the Ochs-Sulzberger family to eventually take over the company once he retires, a development the chairman hastened to add isn’t coming anytime soon.
“We are going to develop them,” he said. “There will be at some point, choices to be made. But yes, there is a succession plan.”
As
for the nitty-gritty of running the company, New York Times CEO Mark
Thompson said the company is investing in numerous online platforms and
digital applications to grow revenue, which fell 21% in 2013 to $1.58
billion. Advertising revenue has fallen for 13 straight quarters.
Digital
subscriptions have increased, boosted by a variety of online offerings
and a sometimes controversial native advertising campaign that allows
marketers to format content that looks similar to the newspaper’s
articles. Additionally, New York Times rebranded the International Herald Tribune as the International New York Times, seeking to grow revenue outside North America.
“Is
it possible to believe that revenue at New York Times will increase,
yes it is,” said Thompson, who was hired in late-2012 from the British Broadcasting System,
the first CEO hired from outside the company since Adolf Ochs purchased
the newspaper out of bankruptcy in 1896. “As a company, we have to get
used to the idea of experimenting and innovating and trying new things
while recognizing not everything is going to work.”
One area of
concern for both the publisher and CEO has been China’s efforts to
hamper the newspaper’s coverage of the country’s Communist Party, which
dominates all facets of daily life in the world’s second-largest
economy. Thompson said that even as the government has refused to grant
some reporters visas in the wake of investigations, that alleged
corruption among high-ranking party members and their families, “traffic
via VPNs through our Chinese-language Web site…suggests we’re getting
some extensive both and indrect readership in China.”
“We think
that what we’re doing in China will continue to command interest and
respect, and will be valued in China, and in what will probably be a
long time rather than a short time, that will lead to potentially,
ultimately, commercial success for the New York Times in China,”
Thompson added.
As for Carlos Slim, the billionaire owner of Latin American telecom giant America Movil
, Sulzberger said the Mexican tycoon, who is sometimes cited as a
possible buyer of the New York Times, is a passive investor who has
never asked for a board seat. Slim owns 11.9 million shares in the
company, good for an 8% stake.
“Carlos is an investor, it’s
really that simple,” Sulzberger said. “He’s a shareholder, a major
shareholder. And by the way, great one. he’s never asked for a place on
our board of directors, or anything. The Spanish term is, he’s a mensch.”