Tuesday, November 14, 2006

Wall Street Should Stop Interfering With The Newspaper Business

While I was away in London, the Morgan Stanley Investment Management firm publicly threatened the arrangement under which the New York Times became and remains the nation's most eminent newspaper.

It turns out that over a year, these slimy representatives of corporate America have been trying to get the NYT to abandon Sulzberger family control and give in to the kind of craven profit seeking interests that have ruined the Tribune Co. and all the Times-Mirror newspapers Tribune purchased six years ago.

Wall Street is trying with all the resources it has, and they are considerable, to subvert American freedoms by making newspapers just another business rather than a sacred public trust. They don't like the honesty of newspapers, because honest reports have put many unscrupulous businessmen in jail.

By ending the arrangement under which the Sulzberger family controls the voting stock in the New York Times Co. and making all the stockholders responsible for key policy decisions, Morgan Stanley could then institute the kind of cost cutting Tribune is trying to force on the L.A. Times.

There may be a lawsuit over this, but every appearance is that the Sulzberger family can legally keep control in the family. Of course, that won't last forever. We see in the Chandler family here in Los Angeles what can happen to even the best of families, as new generations become greedy, lose their moral character and demand greater and greater stock dividends. In Los Angeles' case, the family finally sold the paper.

As the New York Times begins to fight for its life against these business interlopers. there are new indications in the L.A. Times this morning that a sale of the L.A. Times and possibly the whole Tribune Co. is only a matter of time and hard negotiating. The present owners, doomed by their own ineptitude, have worked themselves in a position where they either have to sell or see the stock price collapse. so much for the stock buyback strategy of Dennis FitzSimons, the failed CEO of Tribune.

It seems clear on reading the story by Jim Rainey this morning on the first appearance in the L.A. Times City Room of the new editor, James O'Shea, replacing the wickedly-dispatched Dean Baquet, that he expects to be a short timer. From what O'Shea told the staff, he has left his wife in Chicago and he doesn't expect to be here long.

"You all know...sometime after the first of the year we are probably going to have new owners," he said. "And that could be a lot better for everybody here. But don't kid yourself, it could also be worse, a lot worse."

O-Shea is trying to scare people. The fact is that even Gannett or Rupert Murdoch would have more interest in keeping the Times a great newspaper than the Tribune Co. has.

But, of course, we can hope for far better than Gannett or Murdoch. The best solution for the Times would be new local owners, fresh blood. As I've said in recent days, I tend to favor David Geffen, thinking he would put his all into the paper.

One thing I'm sure we won't have is the Chandler family. After all, when reactionary elements of that family nudged Otis Chandler out of the way in the 1980s, they showed absolutely no interest in running the newspaper themselves or doing anything but collecting more dividends.

The Chandler family is in the past. To the extent, Chandler family representatives on the Tribune board are encouraging, or forcing, a sale of Tribune, all power to them. But they will not be back owning the Times. Harry Chandler is not going to be publisher, no matter how good he sounds in the Current section.

However, it is highly possible that Baquet will be brought back by new owners as editor. With a sale pending, if I were Baquet I wouldn't be too quick to accept other job offers.



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