N.Y. Times Shares Jump on Greenberg Report

The New York Post says the former AIG head is buying up stock.
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After being pilloried in the pages of

The New York Times

for his leadership at

AIG

(AIG) - Get Report

, Maurice "Hank" Greenberg may be about to join Wall Street in its rebellion against the newspaper's parent company and its controlling family.

The

New York Post

reported Wednesday that the former head of AIG is buying up "hundreds of thousands" of shares of

New York Times Co.

(NYT) - Get Report

, which also owns

The Boston Globe

and a slew of other media properties. The paper cited unnamed sources.

Greenberg's reported activity recently moved shares of New York Times up $1.45, or 6.3%, to $24.48, on nearly twice their average daily volume.

The report gave rise to speculation on Wall Street that Greenberg will use his stake in the company to challenge control of the Sulzberger family, which is effectively preserved by its dual-class share structure.

The Sulzberger's stake in the media empire gives the family all the voting rights in the company, allowing them to preserve the editorial mission of the organization even when it conflicts with the whims of the stock market.

These days, with newspaper circulation and ad revenue in a tailspin, shares of New York Times are falling and the other class of shareholders 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.

Meanwhile, a local group of investors headed by the former leader of

General Electric

(GE) - Get Report

, Jack Welch, has expressed an interest in buying the

Boston Globe

, which has been hit particularly hard by revenue declines.

Welch and his crew, which also includes advertising executive Jack Connors and Boston concessionaire Joe O'Donnell, were reportedly mulling an offer of $550 million to $600 million for their hometown paper -- roughly half of the $1.1 billion that the New York Times paid for it in 1993.

So far, the New York Times has

resisted calls to sell the Globe, but it has been criticized by local labor groups and politicians like Sen. Edward Kennedy for its deep cuts in the newspaper's editorial staff.

The Wall Street Journal

reported last week that Welch's group may still make a formal bid for the paper early next year.

With New York Times shares down 38% since the start of 2005, these various firestorms could set the stage for a deep-pocketed activist to wage a control battle against the Sulzbergers.