CNNMoney.com- It seemed too easy. Two months ago, a pair of little-known hedge funds informed the New York Times that they were mounting a campaign to elect four directors to the company’s board. Monday, the nation’s most powerful newspaper publisher capitulated and agreed to support two of the insurgent nominees at its annual meeting next month.
How could the Times be so easily bought to its knees? The dissidents – Harbinger Capital Partners and Firebrand Partners – amassed a nearly 20% stake in the Times. The company’s controlling shareholders, the Sulzberger/Ochs clan, couldn’t brush off them off as they did a Morgan Stanley fund manager who tried to shake things up at the company last year.
The hedge funds have declared victory. But perhaps they are being a little hasty. The truth is, Arthur Sulzberger Jr., the company’s chairman, may have been the true winner for avoiding a bitter proxy war that might have raised questions about his leadership and damaged the Times.
The New York Times, after all, is no ordinary public company. Presidents quake before Times’ op-ed columnists like Maureen Dowd. Wall Street isn’t as easily cowed – not when the company’s stock has fallen nearly 60% in the last five years. But even deep-pocketed hedge fund managers can’t play too roughly with the Paper of Record.
