Dartblog

The chairman of The Washington Post Co. writes an opinion piece meant to save the chairman of The New York Times Co., and publishes it in The Wall Street Journal. Does anyone know what Morgan Stanley’s argument is?

UPDATE: Steve Bainbridge—no special fan of the Times or the Sulzbergers—provides a keen overview of the situation here. He writes that he is “particularly unsympathetic” to Morgan Stanley’s position, which is that the company’s dual-class stock structure, which allows the Sulzberger family a permanent controlling vote when questions come before shareholders, may once have been a necessary bulwark for editorial independence but is now working against the health of The New York Times Company and the weal of its shareholders around the world. Why? The parochial struggles in the boardroom are unknown to be, but on principle the argument is that the Sulzberger family, by owning only 19% of the company’s equity but a controlling share of the vote, represents a single concentrated interest able to act unilaterally contrary to the best interests of the paper. As evidence that that has proved a problem, Professor Bainbridge notes the Times’ well known lackluster performance.

In the editorial linked above, Donald Graham—who controls The Washington Post through a similar dual-class scheme—says that shareholder votes mustn’t be decided merely by shareholders because that would put the newspaper’s editorial integrity in jeopardy: better to keep it in the family. That is a difficult pill to swallow, and I imagine Professor Bainbridge agrees. Yet he writes, sensible, that “Morgan Stanley accepted whatever trade-offs the deal [to acquire stock in the Times] entailed as appropriate compensation for that risk” of control of the company being kept insular, unaccountable, and possibly deleterious.