It's no wonder the New York Times is a valuable prize, given its palpable influence, felt daily in the U.S. and abroad. That's drawn the interest of a Chinese businessman named Chen Guangbiao, the latest self-styled tycoon to consider a bid for the Times. He made his riches in the recycling business and claims to have raised enough cash — about $1 billion, according to a story in the Times — to buy a large or controlling stake in the company.
One problem: Unlike most publicly traded companies, control over the New York Times is not for sale.
The Ochs-Sulzberger family that has run the newspaper for the past 117 years has an ironclad grip over the company through its Class B shares, which aren't traded over any public markets. We covered some of this in a previous story when another bluster-filled moneyman made similar claims.
Note a few changes from the last post that might make investors even less likely to part with the company: The Times Co. stock is now trading at about $16 a share, and its market value is $2.33 billion; the company recently restored quarterly dividends to shareholders, which should net the Ochs-Sulzbergers $3.1 million annually. It's better than nothing but far lower than the $20 million they used to get before the recession.
Bloomberg Businessweek contributor Roben Farzad asks whether the board would have to consider an offer that far exceeds its current share price as part of its fiduciary duty to shareholders. It's a good question that doesn't have a clear answer since the Ochs-Sulzbergers effectively control two-thirds of the company's board seats. Also, the owners don't typically say what's on their minds.
The Times Co.'s proxy does make clear that when someone purchases a share of the Times, they're buying into its central mission: journalism. Profit is presumed. Therefore, any bid, no matter how lucrative, would still have to take that into consideration. Keeping in mind China's antagonism toward journalism — the Times website is blocked there, as is Bloomberg.com — Chen should expect to face plenty of scrutiny.
Whether a dollar value can be placed on journalism itself isn't a debate we are prepared to delve into at the moment. Maybe ask Rupert Murdoch?