New York Times Sticks With Beantown

It all amounts to a classic tug-of-war between the short-term interests of disgruntled investors and the long-term interests of a newspaper family that wants to preserve its legacy.

"Wall Street and the Sulzberger family have totally different interests in this," says Edward Atorino, analyst with the Benchmark Company. "Investors want the stock price to keep going up. The Sulzbergers want to protect the longstanding political, economic and social agenda of The New York Times. Any effort to weaken the family's control is a threat to that, so they want to squelch any semblance of that right away."

The Sulzbergers have managed to enjoy the fruits of the public market while still retaining control over the family's franchise by maintaining a dual-class share structure, which keeps control of the company out of the hands of investors. With the rise of the Internet wreaking havoc on the company's business model in its publishing units, the public is getting restless.

Morgan Stanley Investment Management, which owns a 7.6% stake in the company, has proposed that the company separate the jobs of chairman of the company and publisher of The New York Times. Both positions are held by Arthur Sulzberger Jr., who has been the subject of criticism recently for his stewardship of the company and its flagship newspaper.

The firm also requested that the company's board allow shareholders a chance to vote on whether its dual-class share structure should survive. Atorino says the Sulzbergers have no reason to consider this proposition.