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April 23, 2008
New York Times Company annual meeting
I attended the New York Times Company's shareholder meeting yesterday. As CNBC's website reported, the most dramatic moment occurred when a shareholder asked about the rumors of the paper being for sale and Mr. Arthurs Ochs Sulzberger Jr. stated calmly but emphatically that the paper was "not for sale."
However, a second dramatic point came when a former Times worker came to the microphone to state that the closing of one of the two printing plants, a cost cutting operation, had resulted in the Times being unable to be delivered to his neighborhood before 11 am, long after commuting customers had boarded their trains and buses.
The Times' annual meeting was much more subdued than last year's gathering. The crowd was, in my estimation, a bit smaller, at approximately 325 people at their new in-house auditorium. CNBC cameras made their appearance outside the building before the meeting but did not stay 'til the end to interview shareholders as they exited. No other television or internet cameras were visible outside the building.
Chairman Sulzberger and CEO Janet Robinson tried to put the best possible spin on the numbers, stating the nineteen million unique visitors came to newyorktimes.com in March of 2008 [quite a low double digit multiple of AT's total - ed.], up from five million a few years ago. Still, Mr. Sulzberger and Ms. Robinson made a case for the company turning in the right direction. The question is, how quickly will the company grow compared to others? There was much talk of online New York Times sites directed at upscale women, relating to both fashion and home decorating and upscale motherhood, complete with interactive exchanging of information at Times blogs.
At one point, Chairman Sulzberger talked of two billion dollars in advertising revenue, a two and a half percentage point increase from a year ago. This sounds impressive out of context, but it begs the questions: a) what are the expenses associated with that $2 billion figure? and b) why did the Times recently report such poor earnings? My personal physician has told me that he finds it much more cost effective to advertise for nursing and medical technician help online -- and not at Times' owned websites.
The following issue may seem trivial, especially to liberals -- until the day it is not. For a publication that likes to believe it knows more about homeland security than the government does, the New York Times had very shoddy security at its annual meeting. A guard did a very cursory search of my laptop-style shoulder bag, completely missing the large, packaged water gun I had in the bottom further wrapped in a black plastic bag. And, like last year, no one asked entrants to provide a photo ID or compare their names to a computer printout list of qualified shareholders. In contrast to this, CBS' annual meeting last year at the Equitable building in midtown Manhattan required proof of share purchase months beforehand, showing an entrance letter mailed to shareholders and passage through a metal detector. I saw a guard at that meeting using a metal wand on a woman who probably had some metal jewelry that set off the standing metal detector's alarm.
The Times showed a PowerPoint presentation that tried to impress the audience with something called "Brand Asset Valuation," a tool developed by the advertising firm Young & Rubicam. It denotes perception of high status among customers. I saw this as pure smoke and mirrors. It recalled to memory of an article I saw many years ago which stated the Sinclair Oil Company was perceived as a large firm because their corporate symbol was a brontosaurus. The dinosaur analogy is somewhat fitting for The Gray Lady.
Janet Robinson waxed about T: New York Times Style magazine being launched with success in the US and now being added to the International Herald Tribune, with eight more versions to come. One thing that was impressive was all the new strategic partnerships with Google, CNBC, Yahoo, and Monster Worldwide. People much more qualified to evaluate the Time's business model than myself probably couldn't tell you how survivable the paper is, but I believe they actually have a reasonable chance of becoming profitable in this new media environment.
An interesting and dramatic small scene occurred when Cliff Kinkaid of Accuracy in Media accused the Times of having lobbyists in Washington. Mr. Sulzberger emphatically denied this, and then stated, however, there were lobbyists for the newspaper industry in Washington. It was a more honest reply than you can get from Senator Clinton or Obama these days, in my opinion.
Another more dramatic -- yet calm -- exchange occurred when a Times worker/shareholder criticized the company for selling their old headquarters building for $175 million to Tischman Speyer, only to have them, in turn, sell it for $525 million. Michael Golden, board chairman, answered this and admitted that the Times was caught by surprise by the steep rise in Manhattan real estate - and he believed that Tischman Speyer also miscalculated and probably could have gotten more money for the old building had they held it a bit longer.
The meeting ended shortly after that. As far as annual meetings go, it deserved a full grade higher than last year's presentation, now a B- or a B. Whether this new persona, complete with new outside experienced business board members, will help enough, remains to be seen, but they aren't going down passively.
It was a meeting this year -- not a circus.
(Jack Kemp is not the politician of the same name.)