Jon Fine, of BusinessWeek, disagrees. Fine, among others, argues that the Times Co. doesn't have to do anything to react to Wall Street pressure. Its two-tiered stock setup protects it, this argument goes, because the Sulzberger family controls all of the company's voting stock. This theoretically insulates it from the kind of investor pressure that led to the sale of Knight Ridder and Tribune Co. over the past year.
Not so. While the two-tiered stock protects against an outside takeover, it doesn't protect against internal dissent among the Sulzbergers that can lead to major changes at the company. Wall Street's complaints about the company's results and Arthur Sulzberger Jr.'s management are heard loud and clear by family members, and schisms no doubt are developing as these issues are debated within the family.
Family-owned companies are a tinderbox for this sort of thing--later generations of ownership, who see only dividend income spread among increasing numbers of siblings and cousins, start asking hard questions about their inheritance. These later generations don't usually have the emotional ties to the core business; they just want what's due to them.
You don't have to look very far to find examples of how this family dynamic can tear companies apart: The newspaper industry, with its long history of family ownership, is rife with such stories. The San Francisco Chronicle, Chicago Sun-Times and Los Angeles Times were sold because of similar family upheaval over the past few years. (Ironically, the Chandler family's sale of the LA Times wound up triggering the recent sale of Tribune Co.). Two more notorious examples: The Binghams of Louisville and the Cowleses of Des Moines, whose family divisions wound up giving Gannett two of its flagship papers.
The New York Times is not going to wind up in the hands of Gannett. But it's highly likely that some sort of major change will take place in the company's corporate structure as a result of the current Wall Street pressure. That could mean taking the company private, as Mutter suggests; a management change; a sale of assets (already underway, in fact); or some combination of all three. Bet on it. (Even BusinessWeek's Fine has written that the company could possibly go private.)
As I said in November, The Times Co., classically, is "in play," in Wall Street parlance. Any smart corporate mergers and acquisitions expert or investment banker will tell you that where there's smoke, there's fire. Status quo is not an option. One way or another, it will be a very different company in a few months. It's inevitable and inexorable when pressure like this builds. And the history of the newspaper industry proves it.
Update: Former-Timesman-turned-investment-banker Steven Rattner says there's "no possibility" that the Times Co. will change its two-tier ownership structure. That seems to rule out the going-private scenario. But it doesn't mean that the Times Co. won't make other moves (which Rattner seems to signal in his comments) to mollify Wall Street. The company's annual shareholders' meeting is in two weeks. That should be an interesting show.
Update II: Former General Electric CEO Jack Welch, who was attempting to purchase the Boston Globe from the Times Co. last fall, now says it is clear to him that the Times has "no interest" in selling the Globe.