Media Curmudgeon

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March 23, 2007

Wrong Headline, Wall Street Journal

Memo
To: Editor, Wall Street Journal
From: Media Curmudgeon

Good story on the front page of the Wednesday, March 21, edition about the New York Times, but you needed to change one word on the headline, which read “How a Money Manager Battled New York Times.” It should have read, “How a Money Manager Battered New York Times."

The Journal's article by Sarah Ellison was the most thorough and in-depth analysis I’ve read of the ongoing feud between Morgan Stanley’s Hassan Elmsary and Arthur Sulzberger, Jr. and his family’s New York Times. Please congratulate her on my behalf. As usual with your front-page stories, you deal with important current issues by humanizing them and focusing on the struggles of individuals affected by the larger issues. In this case, the larger issues are: 1) the decline of advertising and circulation in the newspaper industry and its struggle to adjust to these declines caused largely by readers and advertisers moving to the Internet and 2) the pressure Wall Street is putting on publicly held newspaper companies to show more profit and, therefore, stock growth.

In a previous blog I faulted the PBS “Frontline” program for not revealing compensation facts about Wall Street analysts who were telling the Los Angeles Times how to run its business. I would have liked your article a lot better if it had indicated what Elmsary’s personal financial interest is in seeing the NY Times’ stock go up. In a previous blog titled “Like Any Other Business?”, I wrote that the following questions should be asked of analysts who are trashing a company: “What percent of the company stock does your fund/company own?”, “What is your annual total compensation?”, ”How much money is at stake in your performance bonus if the company stock goes up, say three points?” “How much is your fund up or down this year?”, and “How will the percentage it’s up or down effect your bonus?”

Elmsary claims he’s looking out for the interests of his stockholders in his fund, but, as your article points out, he has been relentless and public in battering the Times. I think we should know what he personally has at stake, then we can judge better if his claims are justified or self-serving. Without that information being disclosed, it could look more like battering than battling.

Posted by Charles Warner at March 23, 2007 11:31 PM

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