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New York Times: Don't Expect a Sale

Stocks in this article: NYTAMZNTRBAAWPO

NEW YORK ( TheStreet) - The New York Times isn't likely to follow The Washington Post and the Boston Globe into the hands of a billionaire owner who offers to make deep-pocketed digital investments to go along with ambitious journalism, say industry observers.

Monday's surprise announcement that Washington Post (WPO) Chairman Donald Graham, the son of the newspaper's legendary publisher Katherine Graham, plans to sell the iconic daily to Amazon (AMZN) founder Jeff Bezos prompted speculation Washington Post Sale Ushers In A New Age Of Publishing that New York Times (NYT) may also seek a sale, possibly to outgoing New York Mayor Michael Bloomberg, the billionaire founder of the news organization that bears his name.

But the chances for such a transaction are remote, says Alex Jones, director of Harvard University's Shorenstein Center on the Press, Politics and Public Policy, and author of The Trust: The Private and Powerful Family Behind the New York Times, the seminal history of the Times' Sulzbergers, the papers' founding family.

The reasons are both personal and financial.

The biggest impediment to a sale of The Times, Jones explains, is the trust itself. The company is jointly-owned by an extended family, and virtually all members of the family would have to agree to a sale for such a transaction to take place.

"The family created a trust environment that would make it extremely unlikely that the paper would ever be sold during the period of the trust, which goes on for the rest of this century," Jones said in a phone interview from Cambridge. "But also, they don't need to sell in the same way that the Graham family felt it needed to. They've done very well with their paywall, and are considered in a class by themselves in terms of newspapers."

"There's no reason to believe, given my understanding of the culture of the Sulzberger family, that they would abruptly and unanimously decide to sell, and that's because of the trust," he said.

The Times is also having some success building its newspaper for the digital age in ways that The Washington Post has struggled over the past ten years, said longtime newspaper analyst John Morton. Management, led by recently appointed CEO Mark Thompson, is in the process of re-branding the International Herald Tribune as the International New York Times, and creating a digital magazine run by national editor Sam Sifton, he added.

"The company has narrowed its focus to enhancing the Times's brand name, nationally and internationally, and the newspaper's financial performance, if you take out all the non-cash accounting adjustments, has been reasonably solid," Morton said in an e-mail.

Last week, New York Times said digital subscribers to the flagship newspaper's U.S. and international edition increased 35% to 699,000, driving a 5.1% increase in circulation sales. Advertising across the company did fall for an 11th consecutive quarter, declining 5.8%.

The financial outlook for The Washington Post has been far more severe. The company's newspaper group lost $49 million in the first half of 2013, and $45 million in 2012. The Times, in contrast, remains profitable.

The Sulzbergers have become the last of the iconic newspaper families of the 20th Century having watched the Chandlers exit the Los Angeles Times, the McCormick's sell off the Chicago Tribune and similarly with the Taylors of Boston and the Binghams of Louisville.

"I suspect the rumor mongers bring up Bloomberg simply because he's in New York and filthy rich," Morton added. "He's never given any indication of interest in investing in newspapers."

"I continue to be convinced that the Sulzbergers would never sell the Times, regardless of how advantageous a deal could be to the family's wealth, there's just too much dedication there," Morton added. "Of course, I once thought the same thing about the Grahams."

Written by Leon Lazaroff in New York

>To contact the writer of this article, click here: LeonLazaroff.>.

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