N.Y. Times Family Leaves Morgan Stanley
Saturday, February 3, 2007
The family that holds controlling interest in the New York Times Co. is moving the bulk of its assets from longtime manager Morgan Stanley, apparently because a fund manager there has been critical of the slumping media company.
The Times Co. confirmed yesterday that the Ochs-Sulzberger family is moving its assets but would not identify which firm would now manage them or disclose the amount being moved. Bloomberg News values the family's stake in the company at $690 million.
Times Co. Chairman Arthur O. Sulzberger Jr., whose great-grandfather, Adolph S. Ochs, bought controlling interest of the Times in 1896, has been under attack by Morgan Stanley fund manager Hassan Elmasry for more than a year.
Elmasry points out that Times Co. stock, which closed yesterday up 66 cents, at $24.17 per share, is down nearly 40 percent over the past two years. Morgan Stanley holds 7.6 percent of the Times Co.'s shares.
Elmasry has called for an end to the Times Co.'s dual-class stock structure as a way to jump-start the company's value. The Times Co.'s Class A shares are open to public trading, but its Class B shares can be held only by members of the Ochs-Sulzberger family. The preferred shares give them control of nine of the company's 13 board seats, though the Class B shares represent less than 1 percent of all outstanding stock.
The Washington Post Co. has a similar ownership structure.
Elmasry has written that such an arrangement protects Arthur Sulzberger and other family members from accountability for the company's lagging performance.
"We believe that the [Times Co.'s] current corporate governance practices deviate from what is widely considered to be best practice by corporate governance experts," Elmasry wrote last autumn.
Sulzberger appears to have struck back by pulling his family's assets, which include their Times Co. holdings, from Morgan Stanley. Times Co. spokeswoman Catherine Mathis would not confirm the motive for the exit from Morgan Stanley.
The Times Co. is retrenching at the end of a tough week, during which it reported a $648 million loss in the fourth quarter of last year, owing to an $814 million write-down in the value of its New England newspapers, including the Boston Globe.