Others do, too. Investors seem to have a split opinion on how the company is coping with rapid changes in the industry. “It’s actually doing a better job than most,” says Edward Atorino, a media analyst with The Benchmark Company. “It’s going after luxury goods with T magazine; its Internet revenues are growing; its circulation remains fairly strong.” Some analysts and large investors don’t see things in such a rosy light, and though they prefer to do their sniping off the record to avoid publicly antagonizing Sulzberger, it’s safe to say they have serious qualms about his management competence. Rank-and-file shareholders , meanwhile, were not shy at the Times Company annual meeting, where they pressed Sulzberger on alleged blunders. For example, one shareholder raised the issue of the deal the company made on its former Times Square headquarters. In 2004, the Times sold its longtime home at 229 West 43rd Street to Tishman Speyer, a real-estate firm, for $175 million. Tishman then flipped the fifteen-story building less than three years later, selling it for $525 million before the Times had even finished moving out. That $300-million-plus gain for Tishman exceeded what the Times cleared by selling nine television stations the same year. When queried about the property sale at the annual the meeting, Michael Golden, the company’s vice chairman and Arthur Sulzberger’s cousin, admitted that the company had “missed” on the building sale, but contended that no one could have predicted the heat of the New York real-estate market, an assertion that might come as a surprise to anyone who had shopped for real estate in Manhattan in the last decade or so.
When another shareholder rose to complain about the lack of accountability of management to shareholders for such decisions and whether family control of The New York Times Company was good for shareholders, Sulzberger readily conceded: “That’s a core question.”
Indeed, it is a core question—and has been for most of the 112 years following Adolph Ochs’s acquisition of the Times in 1896 as a long-shot bidder from Chattanooga. Since Ochs’s death in 1935, the paper has been controlled by a handful of family members whose principal objective has never been to maximize financial returns. Perhaps as a result, and contrary to common perception, the paper has a long history of financial struggles that it has pulled through.
As detailed in The Trust, an authoritative history of the company written by Susan Tifft and Alex Jones, one of the reasons Adolph Ochs was able to acquire the Times in the first place was that it was headed for bankruptcy. And though Ochs greatly expanded circulation and advertising, it was still a touch-and-go proposition for much of his tenure. The paper was loaded with debt, and for years stock certificates representing a controlling interest in the paper sat in the safe of a creditor, pledged as security for loans (a fact Ochs concealed even from family members). During the Great Depression the paper’s net income fell more than 75 percent, from $5.6 million in 1929 to $894,000 in 1936. Even in prosperous times, the paper’s profit margins hovered below 5 percent. Money was seen as so potentially corrupting to the paper’s mission that for a time the family trust invested exclusively in Treasury bills to avoid any extraneous business entanglements.