Sulzberger seismology: Is the family easing out Pinch at the NYT?

Thomas Lifson
The Sulzberger family absolutely controls the foundering New York Times Company, and deliberates in secret on its future. Those interested in the fate of the company are reduced to a seismology-like reading of subterranean signs. Something interesting may be afoot.

Oregon-based Wilamette Week reports that Arthur Gregg Sulzberger, son of Pinch Sulzberger (who inherited his job from his own father, AG's grandfather), is leaving his job as a reporter for the Portland Oregonian.

A source in Multnomah County government, the beat Sulzberger has covered since he came to The O in August 2006, says Sulzberger revealed several days ago that he's leaving Portland in late December.

Sulzberger declined to comment. (In case you're wondering, he was not on the list of Oregonian staffers who took the paper's generous buyout offer. Even if he was interested, he lacked enough seniority to apply.)

Current chairman of the board Pinch Sulzberger has proven a disaster, with earnings plummeting, and the stock price reflecting Wall Street's understanding of the company's future value.

stock chart


Today's low (so far) came within 10 cents of the 5 dollar a share range. The stock's high point not so long ago was over 50 dollars. A ninety percent decline has an unfortunate ring to it.

In any publicly-owned company that was not controlled by an indulgent family, CEO Pinch would have been fired long ago. However, Pinch apparently mollified family members by
increasing their dividend income 31% last year -- in the face of the paper's declining fortunes. Wealthy heirs of families long accustomed to unearned income frequently have little or no interest in the degrading business of actually earning money. They just want their dividend checks, and a nearly one-third leap in income can be a persuasive argument to ignore the carping of critics like American Thinker, which has been warning for years that the company is hurtling toward a train wreck.

That stunningly self-interested move (the company could use the cash to strengthen its viability) was not to be sustained very long. Three months ago Moody's openly questioned the company's ability to maintain the dividend.

I am not privy to Sulzberger family conversations, but I have to wonder if some sort of decision has been made to ease out Pinch. His cousin Michael Golden is already vice chairman, and has experience as publisher of the wholly-owned subsidiary, The International Herald-Tribune, and management experience at other publications as well.

If Pinch takes a face-saving retirement, control would go to the Golden branch of the family. Moving his son and heir into a position below Michael Golden could well be an influence-balancing move to maintain harmony among family factions, or equip them for further battle.

Such a scheme, if it is underway, is redolent of dynastic politics in feudal Europe, not modern management, subject to the scrutiny and voting of the owners of its capital. But because the New York Times Company is under the boot of a family which elects a majority of the board of directors by virtue of owning about 10% of the capital in a special category of stock that has the right to elect most of the directors, feudalism is an appropriate conceptual framework. Feudal rulers didn't reign via consent of the governed, and they too had special class privileges, and held themselves unaccountable.

Hat tip: Susan L.
The Sulzberger family absolutely controls the foundering New York Times Company, and deliberates in secret on its future. Those interested in the fate of the company are reduced to a seismology-like reading of subterranean signs. Something interesting may be afoot.

Oregon-based Wilamette Week reports that Arthur Gregg Sulzberger, son of Pinch Sulzberger (who inherited his job from his own father, AG's grandfather), is leaving his job as a reporter for the Portland Oregonian.

A source in Multnomah County government, the beat Sulzberger has covered since he came to The O in August 2006, says Sulzberger revealed several days ago that he's leaving Portland in late December.

Sulzberger declined to comment. (In case you're wondering, he was not on the list of Oregonian staffers who took the paper's generous buyout offer. Even if he was interested, he lacked enough seniority to apply.)

Current chairman of the board Pinch Sulzberger has proven a disaster, with earnings plummeting, and the stock price reflecting Wall Street's understanding of the company's future value.

stock chart


Today's low (so far) came within 10 cents of the 5 dollar a share range. The stock's high point not so long ago was over 50 dollars. A ninety percent decline has an unfortunate ring to it.

In any publicly-owned company that was not controlled by an indulgent family, CEO Pinch would have been fired long ago. However, Pinch apparently mollified family members by
increasing their dividend income 31% last year -- in the face of the paper's declining fortunes. Wealthy heirs of families long accustomed to unearned income frequently have little or no interest in the degrading business of actually earning money. They just want their dividend checks, and a nearly one-third leap in income can be a persuasive argument to ignore the carping of critics like American Thinker, which has been warning for years that the company is hurtling toward a train wreck.

That stunningly self-interested move (the company could use the cash to strengthen its viability) was not to be sustained very long. Three months ago Moody's openly questioned the company's ability to maintain the dividend.

I am not privy to Sulzberger family conversations, but I have to wonder if some sort of decision has been made to ease out Pinch. His cousin Michael Golden is already vice chairman, and has experience as publisher of the wholly-owned subsidiary, The International Herald-Tribune, and management experience at other publications as well.

If Pinch takes a face-saving retirement, control would go to the Golden branch of the family. Moving his son and heir into a position below Michael Golden could well be an influence-balancing move to maintain harmony among family factions, or equip them for further battle.

Such a scheme, if it is underway, is redolent of dynastic politics in feudal Europe, not modern management, subject to the scrutiny and voting of the owners of its capital. But because the New York Times Company is under the boot of a family which elects a majority of the board of directors by virtue of owning about 10% of the capital in a special category of stock that has the right to elect most of the directors, feudalism is an appropriate conceptual framework. Feudal rulers didn't reign via consent of the governed, and they too had special class privileges, and held themselves unaccountable.

Hat tip: Susan L.