The New York Times: Battle of 8th Avenue

Still recovering from the assault on its reputation for journalistic excellence, 'The New York Times' now faces a set of financial problems that is throwing its future ownership into question. Stephen Foley reports from Manhattan

When engineers craned into place the final section of the 300ft steel mast atop the New York Times tower last November, the 52-storey skyscraper became Manhattan's third-tallest building.

Designed by Renzo Piano, the man behind the Pompidou Centre in Paris, the exterior is almost wholly made up of floor-to-ceiling windows, all curtained by a trellis of ceramic tubes that will reflect light and shift colour during the day. Modest, it is not.

When the New York Times journalists take to their new desks on 8th Avenue in the spring, the building will be a topic of contention not just among the architecturally aware. The opening coincides with, and looks sure to inflame, a vicious showdown between Wall Street and the Ochs-Sulzberger family, whose 111-year control of the company is under threat as never before.

Some shareholders have been incensed that the Times should have poured $500m (£254m) into the development at a time when print journalism is in a nerve-racking transition to a digital era, when the Times's own revenues are stagnating and when the share price has been sliding away.

Today, a new "trophy headquarters" would look extravagant for any newspaper group - even one whose achievements tower above those of all but an elite handful of the world's media.

The broadsheet, under its legend, "All the news that's fit to print" and reflecting the glory of 94 Pulitzer prizes, has the best claim to be the paper of record of the United States, probably of the world. It is a bastion of serious journalism and a beacon of liberal politics. And its heavyweight content fans out across the globe through its sister paper, the International Herald Tribune, and a syndication operation that net tens of millions of dollars a year. It was with the New York Times syndicate that Mikhail Gorbachev, former Soviet leader, agreed a return to the world stage as a columnist this month - answering queries on weapons of mass destruction and poverty, as a sort of agony uncle.

The Times is an "international newspaper", says Arthur Ochs Sulzberger Jr, publisher and chairman of the company. He is determined to resist gathering fury on Wall Street, convinced that capitulation would mean the Times has to sacrifice the quality of its domestic and foreign bureaux in favour of short-term profits. In the face of falling readership in New York, the Times has kept its circulation above one million by expanding distribution across the US, and topped up advertising by selling space on the website, which attracts up to 22 million visitors a month. All this would be at risk if dramatic cost cuts ruined the Times's image, he says.

In a telling move, the paper last week hired Dean Baquet to head its Washington bureau. Baquet became a folk hero among journalists last year when he was fired as editor of the Los Angeles Times for refusing to implement cost cuts in the newsroom.

The Times' rebel shareholders say they are just as determined to maintain quality journalism and expansive foreign coverage. Indeed, they say this is what is under threat from the family-controlled board, which has already mismanaged the other assets in the company's portfolio - including The Boston Globe, where revenues are sharply deteriorating, and which has just been forced to close its foreign bureaux. The New York Times group admitted last week it had plunged into the red at the end of 2006 because it had to write off $814m of its investment in the Globe and other New England papers.

"Without independent action by the board, further strategic missteps, capital misallocation, franchise abuse and overly generous compensation are inevitable," wrote Hassan Elmasry, fund manager at Morgan Stanley, which holds 7 per cent of the company's shares. "We are concerned that the sharp deterioration at The Boston Globe may well be a preview of what will happen at The New York Times."

Morgan Stanley's anger has been simmering since Sulzberger inherited the chairmanship from his father "Punch" Sulzberger in 1997. The junior Sulzberger has been nicknamed "Pinch".

Throughout the Times's twin debacles of the past few years - the Jayson Blair scandal, when a young hack was exposed as a serial fabricator of stories and sources, and the Judith Miller affair, when the senior Washington journalist was accused of too-close links to the Bush administration - Sulzberger has jumped to the defence of his journalists and editors, but many have complained he did not prove himself weighty enough as it became necessary to shore up the Times's public reputation.

Elmasry wants the Sulzbergers to cede control, giving up special voting shares that allow them to dominate the board with placemen, even while they own less than a fifth of the company. He also wants Sulzberger to give up some of his power. As publisher and chairman, he essentially reports to himself, while influencing the remuneration of the rest of the board. That is too cosy in an era when "corporate governance" tops of Wall Street's agenda.

On the business front, Morgan Stanley is not alone in its criticisms of Sulzberger's internet strategy, which has failed to generate the subscriber numbers seen by rivals, or of the pay and perks enjoyed by directors. Wall Street believes a dynastic management cannot be a dynamic one, but the dual structure is an article of faith for the Ochs-Sulzbergers. When the company went public in 1969, it did so in a way that gave the family the best of both worlds - by means of shares it could use for acquisitions, without having to bow to holders of those shares.

"Why change it?" Sulzberger asked, in the American Journalism Review. "It gives you the protection so critical to ensure that our journalism is kept at the forefront of all that we do."

Having been refused his request for a vote on the dual-ownership structure, Elmasry is trying to round up supporters for an even bigger protest against directors at the next annual meeting, in April. If he succeeds, it may not be possible for Sulzberger to ignore no-confidence vote. But whether that would force him to give up one or both of his jobs, or corner the Ochs-Sulzbergers into buying out other shareholders, The New York Times will continue to be under intense scrutiny.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
Arts and Entertainment
Jamie Oliver
filmTV chef Jamie Oliver turned down role in The Hobbit
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
Life and Style
Sony Computer Entertainment President and Group CEO Andrew House, executive in charge of Sony Network Entertainment, introduces PlayStation Now
tech
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvReview: Top Gear team flee Patagonia as Christmas special reaches its climax in the style of Butch and Sundance
News
people
Sport
Ashley Barnes of Burnley scores their second goal
footballMan City vs Burnley match report
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
News
i100
Arts and Entertainment
Man of action: Christian Bale stars in Exodus: Gods and Kings
film
Arts and Entertainment
Tracy Emin's 1998 piece 'My Bed' on display at Christie's
artOne expert claims she did not
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Arts and Entertainment
Catherine (Sarah Lancashire) in Happy Valley ((C) Red Productions/Ben Blackall)
TV
Arts and Entertainment
Clueless? Locked-door mysteries are the ultimate manifestation of the cerebral detective story
booksAs a new collection of the genre’s best is published, its editor explains the rules of engagement
Sport
Robin van Persie is blocked by Hugo Lloris
footballTottenham vs Manchester United match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Ashdown Group: Brand Marketing Manager - Essex - £45,000 + £5000 car allowance

£40000 - £45000 per annum + car allowance: Ashdown Group: Senior Brand Manager...

Guru Careers: .NET Developer /.NET Software Developer

£26 - 35k (DOE): Guru Careers: We are seeking a .NET Developer /.NET Software ...

Guru Careers: Graduate Marketing Analyst / Online Marketing Exec (SEO / PPC)

£18 - 24k (DOE): Guru Careers: A Graduate Marketing Analyst / Online Marketing...

Guru Careers: Technical Operations Manager

£Neg. (DOE) + Excellent Benefits: Guru Careers: We are seeking a Technical Ope...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?