New York Times, Media General Board Seats Sought (Update3)
By Anthony Palazzo and Michael White
Jan. 25 (Bloomberg) — Harbinger Capital Partners disclosed
a plan to force its nominees onto the boards of two family
controlled newspaper companies, New York Times Co. and Media
General Inc.
Harbinger plans to nominate four candidates for the board of
New York Times and three for Media Generals, according to
statements today.
New York Times is facing its second challenge after a failed
attempt by Morgan Stanley Investment Management to eliminate the
dual classes of stock that give the Sulzberger family voting
control. Media General has a similar structure, leaving Harbinger
at a disadvantage as it seeks changes.
Harbinger probably anticipates that “if they raise enough
sand and agitate enough, some of the families will start to see
things their way, said John Morton, an independent newspaper
industry analyst in Silver Spring, Maryland.
Media General, owner of the Tampa Tribune and 23 television
stations, has fallen 51 percent in past year and New York Times
is down 36 percent as newspaper companies lose advertisers to the
Internet. The losses have been extended by a U.S. economic
slowdown and a housing slump that has bitten into classifieds.
New York Times fell 16 cents to $14.66 today in New York
Stock Exchange composite trading. Media General, based in
Richmond, Virginia, gained 9 cents to $19.06.
Gabelli Role
Harbinger, a hedge fund run by Philip Falcone, nominated
Eugene Davis, chairman of Pirinate Consulting Group, Jack Liebau,
president of Liebau Asset Management, and media investor Daniel
Sullivan to Media Generals nine-person board, according to a
regulatory filing today.
Falcone didnt immediately return a call seeking comment.
Catherine Mathis, a spokeswoman for New York Times, said the
company had no comment beyond the statement.
Harbinger drew support from Mario Gabelli, the biggest
investor in Media General.
Gabelli hasnt decided whether to back Harbingers entire
slate of nominees to replace directors elected by common
shareholders, he said today in an interview. He did say he
supports Liebau. The board is chaired by John Stewart Bryan III,
a member of the controlling family.
“Its time for a change, said Gabelli, whose Gamco
Investors Inc. owned a 20.9 percent stake in Media General in
November. “Were not sure how well vote on this proposal — we
might abstain. But we do think change would be good here.
`Ill-Advised
Harbingers action is “ill-advised, hostile and thoroughly
unwarranted, Media General Chief Executive Officer Marshall
Morton said in a statement.
Gamco also owns shares in New York Times. Gabelli didnt
return a call seeking comment on the New York Times statement.
In addition to its flagship paper, the company owns the
Boston Globe, the International Herald Tribune and 15 other daily
newspapers. Holdings also include WQXR-FM and more than 30 Web
sites.
Hassan Elmasry, Morgan Stanley Investment Managements
managing director, pressured Chairman and Publisher Arthur
Sulzberger Jr. for more than 1 1/2 years to eliminate the two
classes of stock before liquidating the funds entire 7.3 percent
stake in October.
A board committee will review the Harbinger nominations and
make a recommendation, Sulzberger said in the statement.
“Its conceivable an investor like Harbinger could get a
seat on the board of either company, said Morton, who is not
related to Marshall Morton. “It wont make any difference
because the boards control goes to the super-voting shares and
so long as thats true, theres not anything anybody can do.
To contact the reporter on this story:
Anthony Palazzo in Los Angeles at
