Friday, November 10, 2006

Suggestion Box

Yesterday the President received a visit from almost-Speaker Nancy Pelosi as Dick Cheney slouched grumpily nearby. As the Washington Post put it, Bush "made nice" with the opposition leader over lunch, meanwhile pushing leftovers from his un-Democratic agenda through the outgoing Republican Congress.

The New York Times Company (NYTAB) has also had to make nice with a visitor lately. Hassan Elmasry of Morgan Stanley Investment Management, which owns a nice chunk of Times Company stock, has become a bit of a nuisance. He doesn’t like the fact that the Times Company has two classes of shares, A and B, and that he's stuck with cruddy A while glamorous B is controlled by the Sulzberger family, descendants of the newspaper’s founder. He points out that the Sulzbergers get to elect 9 of the company’s 13 directors, that Chairman/Publisher Arthur Sulzberger, Jr. both reports to the CEO and appoints him, and that the company’s profits are looking wan.

I confess to feeling conflicted here. The Times certainly has a funky structure from a shareholder’s point of view, one unabashedly designed to keep the paper in family hands. But when media companies are up for grabs they tend to get sucked up by huge conglomerates like Disney and Viacom, who aren’t exactly saving the world either - plus which, they make me dizzy.

In any event, it’s clear Sulzberger doesn’t enjoy Elmasry’s visits. We know this because he brought in the law firm of Wachtell, Lipton, Rosen & Katz to represent the Times. These are the people you hire when someone is bugging you and you really, really want them to go away. (I'm probably crazy to mention Wachtell because these guys are smart and powerful, perhaps even ruthless. They’re also famous not only for racking up billable hours that approach infinity, but for actually working those hours. )

The firm’s merger guru, Marty Lipton, is credited with inventing the poison pill, a handy antitakeover device. Lately he’s been gallantly defending his corporate clients against "activist hedge funds." He doesn’t much like the idea of "proxy access" – you remember, that thing where shareholders get to slap their own director nominees right on the company’s ballot. Not long ago his firm put out a memo entitled "Proxy Access – Not Then, Not Now."

This week Elmasry upped the stakes when he filed a shareholder proposal recommending that Sulzberger no longer be both publisher and chairman. The Times says, politely, that it will consider the idea. Meaning, I suppose, the same thing Cheney probably muttered as Bush and Pelosi clinked teacups and spoke of cooperation: Not Now, Not Ever.