How should the Times cover its shareholder fight?

TheDeal.com executive editor Yvette Kantrow wonders how the New York Times will cover the increasing discord among its own shareholders when it has been a bastion of covering shareholder rights in its business section.

Kantrow wrote, “For reporters on the Times’ business desk, the shareholder brouhaha raises the age-old (and, by now, boring) question of how does a media outlet cover itself when it is in the news? Many reporters face that challenge these days as media companies from Time Warner Inc. to Tribune Co. make news with alarming regularity. But the Times’ situation is trickier than most. The paper’s business section, mostly through the punditry of Gretchen Morgenson, has emerged as the self-­appointed keeper of the governance gulag, declaring guilty any management it deems to be in violation of shareholder rights. It reaches its verdict on the flimsiest of evidence, subscribing to the theory that shareholders, especially activist shareholders, are uniformly good; managements, especially those it deems ‘entrenched,’ bad.

“How ironic, then, that the Times’ own governance woes are now illuminating how overly simplistic that shareholder-centric theory can be. Like many media companies, including Dow Jones & Co. and the Washington Post Co., the Times adopted its dual-class ownership structure, which allows the Ochs-Sulzberger family to retain control and insulate its large news operation from the short-term pressures of public ownership and shareholder returns.

“Should the journalism be protected? You can argue either way, but there’s no doubt that there’s a decent case to be made defending the dual-class structure. The problem is, the Times’ many pundits appear incapable of doing it.”

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