NY Times Fighter Gives Up

The Ochs-Sulzberger family trust controls the company by holding its Class B shares, which make up only 0.6% of its total shares outstanding. Meanwhile, they control 70% of the company's voting rights, while the vast majority of shareholders control just 30% of the votes.

At its annual shareholders meeting last spring, roughly 42% of the company's Class A shareholders, the public investors that own the vast majority of its equity, voted to withhold support for the Times' four Class A directors. That marks an increase from the 30% that voted to withhold support last year.

The results amounted to a rebuke to the Times from its institutional shareholder base. But the Class B shareholders were unanimous in their support for the company's nine Class B directors, rendering Wall Street's revolt against the company's corporate structure as little more than a symbolic gesture.

Other major newspaper publishers -- Knight-Ridder, Dow Jones (DJ) and Tribune (TRB) -- have been forced into buyout deals by discouraged shareholders. More recently, Belo (BLC) and E.W. Scripps (SSP) have decided to separate their newspaper assets from their higher growth businesses.

With Morgan Stanley dumping its stake in New York Times, Elmasry is signaling defeat in his efforts to change the company, but he also is showing that he sees further declines in the company's stock price.

Morgan Stanley's fund began acquiring shares of New York Times in 1996 --before Elmasry joined the firm. The adjusted stock price fluctuated from around $10 to $15 that year, suggesting that the fund did not sell at a loss.

But regulatory filings show that the fund has been buying and selling shares of New York Times periodically over the years, so the actual performance of its investment in the company is unknown.

>To order reprints of this article, click here: Reprints