Stop The Presses: Hedge Fund Seeks Times Board Seats

Jan 28 2008 | 7:43am ET

Times are tough for newspapers, with advertising sales and stock prices plummeting. As if that wasn’t bad enough for the broadsheet barons, the weakness is attracting the attention of activist hedge funds.

Harbinger Capital Partners is trying to force its way onto the boards of the New York Times Co. and Media General, both said on Friday.

Birmingham, Ala.-based Harbinger said it planned to proffer four nominees for the Gray Lady’s board at its annual meeting in late April. Nine of the company’s 13 directors are elected by its Class B shareholders, primarily members of its controlling Sulzberger family.

But unlike last year’s bid by a Morgan Stanley money manager to force the Times to change its ownership structure, a hedge fund backing Harbinger’s bid has assured the newspaper that it has no intention of trying to force the Sulzbergers to relinquish control.

“The New York Times is a great institution controlled by the Sulzberger family, and we have no illusion about, or desire to change, that fact,” Scott Galloway, CEO of Firebrand Partners, wrote to Times Co. executives. Instead, the hedge funds want to encourage the Times to focus on its core publishing business, including asset sales and finance digital media deals, Galloway said.

Combined, Harbinger and Firebrand control roughly 4.9% of the Times Co.’s Class A shares. Among Harbinger’s proposed nominees are James Kohlberg, founder of private equity firm Kohlberg & Co. and the son of Kohlberg Kravis Roberts founder Jerome Kohlberg.

In a statement, the Times said it is “open to ideas from and dialogue with our investors.”

Harbinger’s other effort, Media General, is unlikely to be quite as congenial.

“We are frankly puzzled as to what Harbinger hopes to achieve by its hostile actions,” Marshall Morton, CEO of Media General, which publishes the Richmond (Va.) Times-Dispatch and Tampa (Fla.) Tribune, said.

Like the Times Co., Media General has two share classes, giving controlling families over-representations on their boards. Harbinger, which owns some 21% of Media General’s shares outstanding, plans to nominate three candidates for election to the company’s nine-member board. But Morton says that Harbinger has been unwilling to discuss its demands.

“Had Harbinger chosen to talk to us, it would have learned, if it does not already know, of the many strategic, operational and financial steps we have taken and are taking in response to the challenges facing the newspaper and broadcast industries today and, with respect to Media General in particular, in response to the currently depressed Florida economy.”


In Depth

High Time For A Cannabis Hedge Fund?

Sep 30 2014 | 7:07am ET

Launching a hedge fund is always a gamble, but Leslie Bocskor's decision to launch...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.