how indeed... 
Posted on 10/18/2007 6:36:51 PM PDT by LdSentinal
Once the Paper of Record, the Newspaper Now has Investors Bailing. Why?
Boom! And down goes the biggest newspaper name of all.
As you may have read, yesterday brokerage giant Morgan Stanley dumped its entire stake -- $183 million worth -- in the New York Times, in which it was the second largest shareholder. Not surprisingly, Times stock immediately slumped, bottoming at a nearly 3 percent drop to $18.28 -- the lowest it has been in a decade.
The actual damage is probably even larger than that. The Morgan Stanley sell-off has been expected for some time now. Ever since April, after Hassam Elmasry, managing director of Morgan's Investment Management Group failed in his attempt to challenge the Sulzberger family's iron grip on the Times, the market has been expecting Morgan to pull out -- and it is probably no coincidence that the stock has been in downward slide ever since.
On the surface, this appears to be a battle about power. The Sulzbergers have run the Times for several generations -- long enough to be synonymous with the enterprise. But, despite having the family scion, Arthur "Pinch" Sulzberger Jr. running the business, time (and the need for capital) have reduced the family's control -- and allowed in less sympathetic investors like Elmasry and Morgan.
It was in an effort to shore up that slipping control that the Sulzberger's created a "dual-class" stock structure for the Times, which gave the family super-voting over and above the hoi polloi of mere investors. The second, unstated, reason for this unusual financial structure was to protect the position of "Pinch" Sulzberger, whose leadership has been increasingly under fire.
But speaking as a technologist and a veteran journalist (and someone who once wrote for the Times), I think there are even deeper levels to this story -- those dealing with the often foolish choices entrenched companies make in the face of technological revolutions.
Over the last few years, we've seen a number of newspapers find themselves in deep financial distress as they've failed to deal effectively with the challenge posed by Cable News and the Internet, and particularly (on the editorial side) the blogosphere and (on the business side) Craigslist, Google, and eBay. Here in Silicon Valley, the two major newspapers, the San Jose Mercury-News and the San Francisco Chronicle, are shadows of their former selves, the former even been dumped in a humiliating fire sale.
But when B-school students a half-century from now read the case study about the 'death' of newspapers, it will be the New York Times they read about.
As hard as may be for younger readers of this column to believe, twenty years ago, the New York Times was unquestionably the newspaper of record for the United States and (with the London Times) for much of the rest of the world. It had the most famous reporters and columnists, its coverage set the standard for all other news, and its opinions, delivered ex cathedra from the upper floors of the Gray Lady on 43rd Street set the topics of this country's political debate.
Incredibly, almost every bit of that power has been squandered over the last two decades. It's been a long time since anyone considered the Times to be anything but the newspaper of opinion for anyone but the residents of a few square miles of midtown Manhattan. Indeed, about all the newspaper has left of the old days under "Pinch's" dad, Arthur "Punch" Sulzberger, is that old Time's imperiousness -- earned back then, and more than a little absurd today.
Would this decline in reputation have occurred without the rise of the Internet? To some degree, yes. You can mark the turn in the Times' reputation from the early 1990s, when it began to put, on the front page, an increasing number of opinion pieces and feature reporting (most infamously, a glimpse into the apartment of William Kennedy Smith's purported rape victim).
At first, this was dismissed as a mere pandering to the changing tastes of a readership raised on television and gonzo reporting. But it was a first glimpse of the pandering to a supposedly hipper, more sophisticated audience that would become pandemic across the Times' pages under the threat of the Internet age.
At about the same time, I got an early glimpse of how the Times would mishandle the technology side of its business as well. One day, several years after I'd stopped writing my column for the paper, I received a letter from the Times demanding that I retroactively sign over all electronic rights to my stories and columns on file at the newspaper.
As a businessperson, I could understand the thinking behind the Times' actions, but as a writer, it planted a little seed of distrust in the Gray Lady: I knew I would think twice before I would ever write for that publication again -- and I'm sure I wasn't the only journalist thinking the same thing.
This controlling attitude towards its content -- the antithesis of the desires of the providers of that content, who wanted to maximize readership and impact -- only grew more virulent in the face of the growing Web revolution and its successful movement towards open content.
At the Times, this philosophy peaked with the amazingly stupid decision to put the paper's columnists, still among the most influential on the planet, behind a subscription firewall. The Times eventually backed down, but after years of reducing those writers to secondary players in the national conversation, their influence had been seriously diminished.
Increased editorial influence on its reporting, an on-going effort to enforce a business model on a market that didn't want it -- the Times wasn't alone in making these mistakes; indeed, they characterized almost every newspaper in America. Which is why they are all in trouble.
But the Times made one more mistake -- one which it alone could make, and which I think ultimately led to yesterday's meltdown. Most newspapers adopted the always dangerous strategy of trying to become more like one's competitors rather than establishing the defensible position of being even more true to oneself. Like most newspapers, the Times decided to become more timely, more hip, and more judgmental than the electronic media -- when it should have become better reported, more objective, and better written; professionalism being the one arena where the new competitors would have a hard time competing.
What made the Times' decision not to pursue this strategy particularly stupid was that it was, after all, 'America's newspaper of record', a role in which it justly reveled. But you can't hold that title while pandering to the political and cultural views of readers on the Upper West Side. And you can't claim "all the news that's fit to print" when you neglect to notice that an American soldier in Iraq just won the Medal of Honor. In the old days, if the Times didn't cover it, it didn't happen. That insulation is long gone: if the Times doesn't cover it, the blogosphere will -- and millions of readers will starting wondering about the judgment and biases of the New York Times.
Frankly, investors in the Times would be fools not to question the business judgment of the company -- and major shareholders, like Morgan, would be criminally irresponsible to their clients if they didn't start challenging the decisions of Times management -- or not read the "dual class" stock structure as a way for the Sulzbergers to not answer those questions.
If you surfed the Web yesterday you couldn't miss the fact that millions of folks out there were cheering the impending End of Times. I didn't. I want the Gray Lady to straighten out, clean herself up, and regain her old dignity. America needs an honest woman as its newspaper of record.
They did much wrong. The worst was turning traitor.
I am so sorry -— NOT!!!!
It did not really fall apart. Schulzberger drove a stake thru its heart.
bummer. /not
The wages of sin are death. Death of your lying newspaper
At the end of a good article, the author of this article sounds like simpering crybaby with this one statement.
Dude -- America doesn't need a "newspaper of record" anymore.
Stick a fork in it.
Just in time too, the NEW WSJ can now step in and take over, as the world’s newspaper of record. Same as FNC did to cable — chuckle chuckle
Ping!
The Slimes credibility is sorely lacking from its behavior of having staff writers makeup stories and the Slimes clear left-wing biasness in reporting or not reporting are just two of the major problems.
how indeed...
Liberals are so hip that they rarely have time to read anything.
With that said it was up to the Times to remain true to those who actually did support a daily newspaper, the Christian believing majority of the USA.
I quit taking the Times when I lived in South America and the stories became more and more anti Christian, anti America and supporting all kids of bizarre behavior that I could not morally stomach.
I am somewhat sad that the New York Times is having a bad time but hey, they brought it on themselves following their liberal taskmasters kook fringe ideals.
RIP Times.
The traitors running the Times now will never admit they are wrong. They will continue to run the paper into the ground and become increasingly extreme. Which is okay with me—it deserves to be irrelevant.
What group or enity is now the second largest shareholder?
Yeah, well, I think the hard left turn at the Slimes had more to do with it than anything else. With alternatives available a mouse click away, you either play it straight down the center, or you don’t play. Newspapers around the country are finding out that simple truth. The monopoly is no more, the parrot is dead, long live the blog.
Perpetual mischaracterization, omission, and elitism doesn’t build readership. Fewer readers, fewer dollars, fewer investors. The paper’s a waste of post-consumer waste.
Times is just getting what they deserve.
But the New York Times will never be that woman.
That rag has gotten so bad even liberals don’t believe what it prints. Who wants to pay for a pile of lies?
It couldn’t happen to a worse newspaper. The NYT has become a traitorous rag of leftist blather, innuendo and fabrication. Under “Pinch” Sulzberger’s “leadership”, the NYSlimes has evolved from a bad newspaper, to a horrible one.
With any luck, they will go on the market soon so that someone other than a George Soros clone can purchase and operate the paper.
I’m pulling for the owners of Fox News to buy this disaster of a rag and convert it to a respectable newspaper again.
I hope that that POS newspaper goes belly up.
Better reporting, objective, better witting and professionalism have disappeared from the NYT. Actually it has been gone a long time just some liberals are now waking up to the fact.
How soon before Times Square has something in common with Herald Square??
Since the early 30s it seems, maybe even before then, the leftists have understood that the best way to control the debate was to grab the microphone and hang on.
Hence those with the desire for power, in leftist terms, have always gravitated to media, academia and politics. And it’s worked.
By grabbing power and tenure at the universities, they have managed to mold the minds of journalism majors into carbon-copy clones of themselves, which then marched out and got jobs in the papers, radio stations and later television stations.
As the years went by, they inevitably rose through the ranks and assumed the positions of power, slowly but inexorably bending the editorial mindset of the media to their own views.
The fact that the majority Americans never shared those views and were for the most part disgusted with them, never mattered to them, because they had become the gatekeepers.
Talk radio was the first chink in their armor. The forgotten wasteland of AM broadcasting, which was considered beneath their dignity, was hungry for talent and of course the advertising revenue that talent would attract. The result was el Rushbo and history changed course a bit.
Now thanks to Al Gore’s great invention (snicker), the Internet, all the clout they carefully accumulated and protected as gatekeepers has become moot. They can’t control the news anymore because there are too many other places Americans can turn to for that news.
Not only that, as Rathergate and the SCHIP controversy has shown, they can no longer market horseshi+ as roast beef and get away with it. Every obviously biased story they run will have Pajamahadin all over it — lies will be uncovered, they will be called to task for it.
I do agree with this writer. There is a place for a good, neutral, just-the-facts-and-only-the-facts newspaper — it might even be the NYT — but in order for that to happen they would have to purge themselves of all editorial bias (anywhere but the editorial page, anyhow) and return to the true canons of journalistic objectivity and responsibility which were the very reasons freedom of the press was so carefully enshrined in the Constitution.
I don’t expect it to happen however. The leftists never give up power willingly. They will cling to their rattletrap presses and their rusting microphones as their gray lady slides beneath the waves of relevance and becomes moot.
YOU DON'T SAY?!! Bawhahaha...burn baby burn!! For years I've been praying this rag would go under...I guess God heard my cry! It took time, but God's timing is always perfect!! THANK YOU!
Sounds like good advice for certain members of the GOP as well!
I noticed that it isn't till almost the end of the article that the writer mentions the NYSlime's "biases".
These lefty writers all stick together and cover for each other. This one's judgement is just as colored as the NYT's writers.
A vox populi on all their houses.
Leni
The liberals are their own worst enemy,
Everyday it is something new from eleven year old children getting the pill to nuts in San Francisco making a mockery of the Catholic Mass.
Where are all the liberal prognosticators showing outrage at the decline in America.
Liberals in all their enlightened snobbery have pushed the envelope of immorality into the face of a mostly Christian America.
America is ripe for a revival.
they have jobs for some over at media matters
Someone should tell the author to come to FR.
We are the record of the future.
Amen.
...... I want the Gray Lady to straighten out, clean herself up, and regain her old dignity. America needs an honest woman as its newspaper of record.................................
My rabbits don’t really care!
They hop up to the NY Times on the floor, or the Providence Journal, maybe even the LA Times:
They sniff, flip around their backsides to the outstretched paper, raise their back legs, and let go with a barrage of feeling about these disgusting rags.
Given the choice between the Times versus the WSJ, the rabbits are able to hit the Times, 100%.
?? Why is that, do even the rabbits know that the Times is total BS,
(or is it a difference in the smell of the print??)
Enquiring minds want to know!!
That was an insightful comment, I agree.
Which happened not only for all the reasons given -- blogosphere on the editorial side, Craigslist, etc. on the business side -- but precisely because the Murky News is famous for beginning stories with, "Here in Silicon Valley," and then following up with amateurish, provincial, Master-of-the-Obvious writing and observations.
Oh that is precious.
For people who love reading- well written sentences, good grammar, rare spelling errors and logical development of the story, the NY Times was at one time almost without peer in America..As for the content of the articles that was open for debate and it seems like everybody who read the Times had an opinion on it- either good or bad, but no in between...
But the Sulzbergers have run it into the ground to the point where it is irrelevant due to greed,pride and stubbornness. Everything that is in the Times is on the Internet. When they went to subscription on the Internet they lost a lot of readers...Even the core of it’s reporting is passe: nobody wants to read a 6 page Transcript of a Senate Hearing on the misdoings of a government agency when they can-if they wish-read it on the internet. Times is the old media...very old media..
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Excellent post.
The good news is that with the decrease in readership, the NYT will have a smaller carbon footprint;)
Is Howlin back?
I'm hoping...
Newspaper of record = 
Vinyl record
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