Good Old Boys Club: WaPo Publisher Defends NYT's Shareholder Practices

May 2nd, 2007 5:31 PM

For all journalists' talk about political elitism and cronyism, they are probably more inclined to toe the party line when one of their own comes under fire.

Almost always, you can count on an elite media figure to defend another one. Such was the case earlier today when Donald Graham, the Washington Post's publisher defended the second-class status that regular shareholders receive in comparison to a small liberal clique that has almost exclusive control over the money-losing paper. Incredibly, Graham's argument includes the preposterous premise that making Times (or his paper which operates under a similar structure) be accountable to public investors would promote biased journalism.

What should worry those who care about the New York Times is not the nature of the criticism but the proposed remedy: the abolition of the two-tier stock structure that allows the Sulzberger family to elect 70% of the company's board. [...]

[T]o support Morgan Stanley's campaign to eliminate that company's two-tiered stock structure is to run crazy risks with the future of its most important asset, the New York Times.

Why? Because if the stock structure were eliminated, a line of buyers eager to purchase the company would form within minutes. No one could say no. The line would include private equity firms, high-ego billionaires, international media companies lacking a famous property and lots more.

Who would bid the highest? Perhaps a principled owner, dedicated to the welfare of the Times and the Boston Globe; willing to anger its friends on a regular basis, as good newspapers do; and prepared to spend money and run other risks to sustain the paper like the Sulzbergers. Or maybe the bidder would be someone quite different.

Translation: Our idea of taking money from investors and not giving them anything to show for it is unassailable. Oh, and don't even begin to think for a second that the Post or the Times is biased.