The Four

I felt the Times’ content could, and should, be worth billions in the
digital age. Working with two NYU Stern students with finance
backgrounds, we evaluated every aspect of the Times Company. Our
conclusion: the Times Company was a $5 billion firm trapped in a $3
billion body. I approached Phil Falcone, founder of Harbinger Capital
Partners. I’d partnered with Phil before. When I say “partnered,” I
mean his fund provided the capital for us to take a large ownership
stake, obtain board seats, and advocate for change.
Phil was one of twelve children, raised in Minnesota. He had been
a hockey star at Harvard before becoming a hedge fund manager. A
focused introvert, Phil was one of half a dozen investors with balls of
steel who made a huge bet against the credit markets in 2006. This
made billions for Phil and his investors. Harbinger’s office had bad
cherry wood trim, artificial plants, and old floor fans to keep the
trading floor cool. It felt like a Regus office suite in Cleveland, minus
the charm.
I presented the idea to Phil. It involved both a surrender and a
fight. I proposed that the Times Company could sell 10 percent to
former Google CEO Eric Schmidt and make him CEO of the paper.
This was the surrender. I figured Schmidt could afford to buy 10
percent plus of the firm to give him a vested interest/upside. Eric had
kicked himself upstairs to chairman of Google—making way for Larry
Page to be CEO.
I believed he was likely more open to a different idea (saving
American journalism) than he may have been in the past. The stake
would give him a chance to make money, though nothing on the scale
of one of the Four. (I’m still convinced that if the Times had named
Schmidt its CEO, the company’s value would be dramatically larger.)
The next step, I continued, was for the company to fight. The
Times should immediately turn off Google—and henceforth the
company should refuse to allow Google, or any other company, to
crawl its content. Then, if Google or another internet player wanted to
license the content of the New York Times, it would have to pay for it
—and pay more than anybody else. Google, Bing, Amazon, Twitter, or
Facebook could provide their users with unfettered access to our
content. But only one of them—the highest bidder.