A source familiar with the plans of the investors trying to shake up the New York Times Company (NYT) tells us that this is the group’s latest thinking:
- The group continues to acquire NYT stock. The most recent 13D filing showed ownership of nearly 12%. The group wants to be the largest Class A shareholder and could own as much as 20% by the end of this week. The group will likely stop accumulating stock after the record date for the shareholders’ meeting, which is tomorrow.
- The group’s buying has driven the stock from $14 to $20. The group believes that, if the NYT aggressively pursues its restructuring plan, the stock could be worth $50.
- The group will have another meeting with Arthur Sulzberger, Janet Robinson (CEO), Martin Nisenholtz (CEO Digital), and others tomorrow. The first meetings are described here.
- In the group’s opinion, the value of the NYTCO’s positions in real estate, sports teams, regional papers, and other non-core assets equal the company’s enterprise value at $14 a share. At this price, the group believes, the New York Times organisation itself (including Digital) is essentially free.
- The group believes that, without aggressive restructuring, NYTCO will go out of business. (We think the company would restructure aggressively before this happens, but we agree about the severity of the problem).
THE GROUP’S RESTRUCTURING PLAN:
- Sell off all non-core assets, including: NYT building (estimated value $1 billion) Stakes in sports teams Regional newspapers
- NYT building (estimated value $1 billion)
- Stakes in sports teams
- Regional newspapers
- Consider selling Boston Globe and About.com
- Use the proceeds of these sales to buy new digital assets
- Use the massive traffic to NYT.com and About, etc., to better monetise the newly acquired digital assets.
- Boost the monetization of core NYTimes.com (which lags some competitors)
- Shift the company’s mindset to be more of a digital media conglomerate instead of THE NEW YORK TIMES COMPANY (thus eliminating some of the cultural baggage that goes with that).
The group hopes the meetings with management will be productive. The group also intends to proceed with trying to get 4 directors elected to the board at the April 22nd annual meeting. The group believes that its own voting power will allow it to get at least 1-2 directors added. The NYT has nominated two of its own candidates to the board.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.