Why It’s Hard for Trump — or Anyone — to Buy the N.Y. Times

Photograph by Sipa via AP Images

Donald Trump is the latest billionaire interested in owning the New York Times.

Ridicule of Donald Trump has become an almost daily occurrence. This week, the mockery came after he was revealed to be the latest billionaire interested in owning the New York Times. Again, and again, and again.

New York Magazine’s Joe Hagan, who decided to break news on Trump’s interest in the newspaper, provided the all-important “to be sure” in his piece, saying that it’s unlikely the Sulzberger family, who controls the company, would welcome an offer from the blustering television host and Twitter taunt.

But who exactly is the family? And could a sale to Trump or any other buyer actually work?

A bit of background: The New York Times has been under the control of the Ochs-Sulzberger clan ever since Adolph Ochs acquired the paper in 1896. His descendants, very smartly, safeguarded their rule even after the company went public in the late ’60s by issuing two share classes — a Class A lot, which anyone can buy and is currently trading at around $9 each; and a Class B group, which no one can buy.

It’s the Class B shares that matter. Only these holders can elect the majority of the board, who in turn are charged with all the salient aspects of running the company, whether it’s selecting the CEO, approving acquisitions or deciding if investors should get a dividend quarter to quarter.

Class B folks elect 70 percent of the board, and Class A owners can only choose the remaining 30 percent, meaning the public shareholders are always in the minority. So should a billionaire buy up all the available shares on the market (worth around $1.3 billion at the moment), he or she would only be able to anoint 4 of the 14 directors on the board. A lot of skin to bear for very little say in the game.

While the B shares can’t be bought or sold, the bulk of the shares, or 90.3 percent to be precise, aren’t held by a particular Sulzberger heir but by an eight-member family trust. (The other 9.7 percent are held directly by some family members and a few former employees of the company — secretaries who were rewarded for their longstanding loyalty to the Sulzbergers.)

Those eight family members are forbidden from selling the trust’s holdings for the purposes of a merger or acquisition, “unless they determine that the primary objective of the trust can be achieved better by the sale,” according to company’s filings.

What’s the primary objective? Journalism, of course.

The Times Co., by that measure, is an unusual entity. Despite its desire for profitability, once you peel away at all that capitalist intent, it’s clear the genetic imperative, its stated goal, is to just create good journalism, profitable or not.

Unlike the Bancrofts, whose control of the Wall Street Journal was spread widely enough among squabbling family members to allow Rupert Murdoch to buy the company, the Sulzbergers’ power is concentrated in this small eight-person synod.

A smaller group also means there are fewer people to convince. In this case, any potential buyer of the New York Times would only have to sway six of the eight members to get control. The family elects the eight members every few years, and how they do so is not fully known.

For the moment, they are: James Cohen, who is listed by the company as simply self-employed; Joseph Perpich, who owns a medical services company; Gertrude Golden, an artist; Carolyn Greenspon, a psychotherapist; Steven Green, a partner at an investment firm; Hays Golden, a Ph.D. candidate at the University of Chicago; Michael Golden, vice chairman of the New York Times Co.; and Arthur Sulzberger, its chairman and publisher.

And despite all the lofty decrees around preserving what is one of the most important news organizations in the world, the family, like all other human beings, can also be motivated by cash.

The family used to reap a healthy dividend, drawing in as much as $20 million annually, that once served as a reliable subsidy for some family members who do not have high-paying careers. The last time they got that paycheck was in 2008, four years ago.

 

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