Media Curmudgeon

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October 18, 2007

Who Bought The Times’ Stock?

Yesterday, October 17, there were several stories in the media about Morgan Stanley selling NY Times stock it held in one of its funds. The stories detailed how much stock was sold, but none of them indicated who bought the 7.3 percent stake in the country’s journal of record. It’s a mystery, but I’ll make a guess.

In a blog titled “The Future: Non-Profit New?” I posted earlier this year on October 2, I wrote: “So here’s what I propose to save journalism and the news media from itself and the greed of its owners—officially and legally become non-profit organizations.” Of course Wall Street is still singing the Gordon Gekko anthem, “Greed Is Good,” louder than ever, and as newspaper profits decline, Wall Street will bail out. So who was the buyer of the Times’ stock?

Morgan Stanley’s Hassan Elmasry, managing director of Morgan Stanley Investment Management, unsuccessfully challenged the Sulzberger family's control of NY Times. The family owned a minority of the stock but a majority of the voting stock, which Elmasry didn’t think was fair to investors. Elmasry made no headway in his nasty campaign, so he sold Morgan Stanley’s investment in the Times. Remember, too, that because of this criticism, the Sulzberger, in a fit of understandable pique, pulled took their marbles away from Morgan Stanley. So Morgan Stanley got even by selling their stake in the Sulzberger family game. But to whom?

I’ll bet Rupert Murdoch secretly bought it. Why Murdoch? Think about it: 1) He obviously believes newspapers should be kept alive as a family-owned business. 2) He obviously believes that it’s OK for a newspaper to be a non-profit organization—he’s supporting NY Post losses to the unharmonious tune of over $40 million a year. 3) But he’s smart enough to know he can never wrestle control of the NY Times away from the stubborn Sulzbergers like he did with the feckless Wall Street Journal’s Bancrofts, so he secretly bought Times stock so he could greenmail the Sulzbergers.

The Sulzbergers will have to take the NY Times Co. private sometime if they hope to keep control, and when they do, they’ll have to buy all of the outstanding stock. When they discover, after vomiting in disgust, that Murdoch owns a bundle of it, they’ll pay him at least a 40 percent premium for his stock—a bigger premium that Murdoch paid the Bancroft family.

That Rupert, he’s smart. He knew that with the Bancrofts greed would overcome pride and with the Sulzbergers pride will overcome greed, and he’ll profit on both deals.

Posted by Charles Warner at October 18, 2007 10:17 AM

Comments

Media Curmudgeon at October 18, 2007 12:19 PM writes:

Paul Talbot at October 18, 2007 11:31 AM writes:

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