New York Times Will Win in the Long Run

Shareholders of New York Times (NYT Quote) are deep in the red for the last several years, but if, during that time, someone had been handing out pennies every time the newspaper publisher's reporting was cited on television or in the blogosphere, they would be sitting on a fortune by now.

With the rise of the Internet, the Times, along with the rest of the newspaper industry, is losing touch with consumers. As people increasingly turn to television, online news aggregators, video sites and like-minded bloggers to digest the news of the day, many forward-looking investors are predicting the demise of the printed page and looking elsewhere for good investments.

But it's much harder to make the argument that the information purveyed by newspapers, particularly the Times, has lost its relevance. That's why the biggest threat to long-term shareholders of the company may be the test of wills that's unfolding on Wall Street over its dual-class share structure.

Last week, the ongoing feud between the Times and Morgan Stanley Investments was thrust into the spotlight when The Wall Street Journal published a front-page chronicle of fund manager Hassan Elmasry's publicity campaign to dislodge the company's corporate structure, which preserves control in the hands of the newspaper's ruling family -- the Ochs-Sulzbergers.

New York Times fired back the following day by hiking its annual dividend payments by 31%. Though the Times typically increases its dividend once a year, the boost was much larger than usual, sending a message that the company takes its shareholders seriously despite their lack of voting power.