The seventh tallest building in America
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17 percent of the Boston Red Sox (wtf?)These assets were treated by the financial markets as newspaper
assets, meaning their valuation was a multiple of profits assigned to a
newspaper company (low). So, the disposition of these assets would be
accretive to shareholders. A sum-of-the-parts analysis reflected that in
buying a share of Times Company stock, you were getting the paper for
almost nothing, based on the value of other assets.
We would also lobby to kill the dividend, a payout for shareholders
of around $25 million a year. The company needed the cash to reinvest
in innovation. Best as I could tell, the dividend was merely protection
money so Arthur Sulzberger and Dan Golden wouldn’t be killed at
family get-togethers because they were being paid $3–5 million per
year to fuck up granddad’s company and have lunch with Boutros
Boutros-Ghali. The other cousins wanted their sugar, too.
Phil’s firm, Harbinger Capital, and Firebrand Partners (the name I
gave my firm) teamed up to purchase $600 million in Times Company
stock—about 18 percent of the company. This made us the largest
shareholder. We announced we wanted four board seats and would
push for shareholders to vote a slate of like-minded reformers to the
board. We wanted the company to sell noncore assets and double
down on digital. Harbinger was the brawn (capital); Firebrand was the
brains (lead the proxy fight, join the board, influence capital allocation
decisions and strategy, unlock value, etc.).
Within the company, our plan met with resistance, of course.
During our initial meeting with management, and after we laid out our
thoughts, Arthur Sulzberger indignantly pronounced, “There isn’t a
single thing you’ve presented we haven’t thought of!” Despite this, we
weren’t convinced management didn’t need help. Outside the walls of
the Times building on 41st Street (a tower designed by Renzo Piano I
was eager to unload), all hell broke loose. I had underestimated how
fascinated the media was with... itself. Within twenty-four hours of
us announcing our strategy, there were paparazzi outside my class at
NYU.