A new look at what led to the ouster of the New York Times' former CEO Janet Robinson is renewing interest in a possible sale of the Grey Lady, and the soon-to-be-unemployed Mayor Bloomberg is looking like a prime candidate.
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New York's Joe Hagan is reporting that Janet Robinson was forced out of her position at the Times after she clashed with Arthur Sulzberger's cousin, Michael Golden. Golden was the head of the Times' regional media group that was sold in the fall of last year. Following that sale, Golden wanted the Times to also sell The Boston Globe with the hope that it would free up cash so the Times could resume paying the Sulzberger family stock dividends that many of them relied on to keep up their lavish lifestyles. The Times' plummeting profits after the financial collapse cut many of them off from their primary source of income. Golden also wanted Robinson out of the picture. Robinson had enjoyed years of protection from criticisms within the company because she was so close with Arthur Sulzberger Jr., the Times' publisher, but she had recently feuded with Martin Nisenholtz, the Times' digital guru, and Sulzberger's new girlfriend, Claudia Gonzalez. A move against a Sulzberger family member was the last straw for Robinson:
In the past, Sulzberger had the authority to keep Golden and the rest of his family at arm’s length. Now, with the business struggling and his absences very much a matter of internal discussion, he was no longer in a position to protect Robinson—and, maybe just as important, he had lost the will to do so. His girlfriend didn’t like her. He had lost his digital guru because of her. And now his cousin wanted her gone, too. Sulzberger was up against the wall.
In early November, Golden and Sulzberger made the decision together to fire Robinson.
Robinson's hefty payout after she was let go, Hagan reports, was a protest by members of the paper's board of directors who supported Robinson. "Motivated by what amounted to guilt," Hagan writes, the compensation board awarded her the maximum amount recommended by an outside law firm hired to orchestrate her exit: $11 million came from her pension and retirement plan, $7 million from "her yearly compensation and awards," along with a $4.5 million consulting contract.
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All of this has left the Times without a CEO, though Golden has assumed a decent amount of power since Robinson left. Profits at the company were down last year, mostly due to departure packages like Robinson's. Some are thinking that the paper is vulnerable, after it's decline in value in recent years, and that now would be a perfect time for the Sulzberger family to finally sell.
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Business Insider's Henry Blodget thinks selling the Times is a great idea. "In its heyday," Blodget writes, "the New York Times Company was worth $7 billion and paid a dividend of more than $100 million a year. Now, it's worth $1 billion and pays no dividend." He says the paper's current situation resembles that of the Wall Street Journal before it was bought from the Bancroft family by Rupert Murdoch in 2007. Blodget thinks it's the perfect timing for "an aggressive offer from a dynastically wealthy megalomaniac like Murdoch" that would act as a final cash-out for Sulzberger family members, the same way Murdoch's $5 billion price tag for the Journal helped the Bancroft family sleep easier after letting the paper go.
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Joe Hagan wrote at the end of his New York piece that Michael Bloomberg, "a long-fabled white knight for beleaguered Times staffers," would be a prime candidate to buy the Times. Blodget agrees. Mayor Bloomberg will have more time on his hands in 2013 when his term as mayor runs out, and his media company, Bloomberg LLC, is the second largest in the world after Google. Bloomberg, "could make a huge, preemptive offer for the New York Times Company with only 4-6 months of cash flow," Blodget writes. He says that, "acquiring dying media properties like the New York Times" is the next step for Bloomberg LLC to evolve into "a globally ubiquitous professional media organization."
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Other candidates could include Carlos Slim, the Mexican billionaire the Times owes some $300 million to, and who already owns 7.5 percent of the company. The Times reportedly wants a technologist for its new CEO, so why not follow the same thinking for the new owner of the paper. What if a technology company with cash to burn like Apple decided to buy the Times? That might turn a few heads.
- Arthur Sulzberger
- Mayor Bloomberg
- New York