New York Times (NYSE: NYT) board members may be in for a fight after two large shareholders announced that they will nominate four candidates to the company’s board of directors on April 22nd. The candidates would occupy the four board seats that are elected by regular Class A shareholders while the superior Class B shares - held by the Ochs-Sulzberger family - would appoint the other nine and retain control of the company. Regardless, shareholders are hoping that the four candidates could bring change to a troubled company.
Janet Robinson of Harbinger Capital Partners and Firebrand Partners announced that they were submitting the proposal in a spirit of “cooperation with the board and management that moves beyond the old dichotomy of ‘hostile’ and ‘friendly’”. The hedge funds said they would not pursue a change in the dual class shareholder structure that has garnered so much complaint, but would push for change in a board that “has not been effective in inspiring the requisite bold action this media environment demands”.
The hedge funds demanded that the company immediately take action to redeploy capital to acquire more digital assets, including content and distribution platforms. Many investors have long complained that the New York Times was simply falling behind the times by ignoring key Internet and digital trends and failing to make acquisitions to drive growth. To this end, the hedge funds are bringing on at least two directors with experience in Internet media to help drive the company in the right direction.
In the end, the New York Times still faces a number of key issues that it must solve before it can be considered a good company and investment. The dual class voting structure, which came under fire last year, is still a major problem. However, now investors realize that it is impossible to combat it. Consequently, these hedge funds are now focusing on the next problem: the failure to embrace the digital revolution. To this end, the investors are nominating board members with broad experience in this arena to drive management to focus in on these areas. Combined, these factors make NYT a stock worth watching!
Related Companies
Media General, Inc. (MEG)
Gannett Co., Inc. (GCI)
News Corporation (NWS)