Tiers of Rage
The assault on the fortifications that protect the New York Times’ journalism
By Rem Rieder
Rem Rieder (email@example.com) is AJR's editor and senior vice president.
It's a truly atrocious idea.
Morgan Stanley has stepped up its campaign to eviscerate the New York Times Co.'s two-tier stock structure. That's the bulwark that protects the company from the sharks of Wall Street.
Under the two-tier system, the Sulzberger family owns 88 percent of the class B voting shares. That largely insulates the Times Co. from the ridiculous profit demands of the Street and from the danger of a takeover. It protects the company from the fate of Knight Ridder, which was muscled into putting itself up for sale and has gone away, and the Tribune Co., which now finds itself in play.
And it enables the Times to continue to put out a world-class newspaper, to spend heavily on national and international coverage, to avoid mindless budget-slashing in the name of stratospheric profit margins.
Similar parapets are in place at other surviving bastions of quality journalism, like the Washington Post Co., McClatchy and Wall Street Journal parent Dow Jones.
So what's not to like? Well, plenty, in the view of Morgan Stanley money manager Hassan Elmasry. Elmasry says it's just not right that owners of the nonvoting shares, which constitute the vast majority of the company's stock, choose only four directors, while the owners of the voting shares get to pick the other nine. He wants all the shares to be treated equally. His resolution to toss out the two-tier approach will be considered at the Times Co.'s annual meeting next year, although the shareholders couldn't scrap it by themselves.
Well, guess what. The two-tier system was in place when Elmasry's fund, which has a 7.6 percent stake in the Times Co., bought its shares. If that was such a problem, maybe Elmasry should have bought something else.
Because the last thing journalism needs is to be even more vulnerable to the ravages of the greedheads.
Face it: Years of budget-cutting have gutted many of America's newspapers. And in recent months the trend has accelerated. Hardly a day goes by that Romenesko doesn't bring more sad tidings.
Shuttered foreign bureaus. The incredible shrinking Dallas Morning News. Big cutbacks in Akron and threatened in Philadelphia. (That sure takes the bloom off the private ownership rose.) The Tribune Co. demanding yet more cuts at the Los Angeles Times, running off one of the nation's top editors (and a very courageous publisher) in the process.
One consequence of the carnage has been a sharply reduced number of newspapers with the resources and the will to cover national and international events.
No doubt some would say, so what? Today's mantra is "local, local, local." It's fashionable in some quarters to dismiss papers' aspirations to report far beyond their circulation areas, and to do ambitious projects and series, as driven by vanity and ego rather than a commitment to serving readers.
But serving readers includes watchdog journalism, and watchdog journalism doesn't stop at the city limits or the water's edge. Strong national and international reporting is critical to democracy.
Take the war in Iraq. You need lots of manpower and money to cover it thoroughly. And the number of papers with the wherewithal to do so is alarmingly small. Yet it is critically important for the American people to know what is going on there. It's not a task that should be left exclusively to the AP.
It's no accident that the major national security stories of the past year or so have been broken by the New York Times, the Washington Post and the L.A. Times.
But now the L.A. Times is under siege. To the great credit of its leadership and staff, it has remained top-tier even as its newsroom staff has been chopped by more than 200. But that can't go on indefinitely if short-term thinking leads to yet more staff reduction, as seems inevitable. Unless, of course, one of those L.A. billionaires buys the paper or the entire Tribune Co. And even then, who knows? (See Philadelphia and Akron.)
So we are facing the loss of one of our very few papers committed to covering the nation and the world.
Which makes the New York Times even more important. Now the Times, as you may have noticed, has had its share of snafus in recent years, from Wen Ho Lee to Jayson Blair to WMD. But it remains a national treasure thanks to the quantity and quality and scope of its journalism.
That's why the last thing we need is for some high-flyers to knock down the fortifications that allow the Times to keep doing what it does without obsessing over the quarterly number.