Extra, extra: NYT target letter filed…
Over the weekend, you might have heard the news about a hedge fund’s interest in electing four directors to the New York Times (NYT). Firebrand Partners, headed by NYU Professor Scott Galloway sent the letter to Times Chairman Arthur Sulzberger yesterday and it was filed this morning. Here’s a snippet:
There is nothing wrong with The New York Times Company that cannot be fixed with what is right with The New York Times. We believe a renewed focus on the core assets and the redeployment of capital to expedite the acquisition of digital assets affords the greatest shareholder appreciation and creates the appropriate platform to compete in today’s media landscape. The current Board, while impressive in stature, has not been effective in inspiring the requisite bold action this media environment demands.
Firebrand, which is more of an investment strategy firm than a traditional hedge fund, is teaming up with a fund called Harbinger Capital. The pair first teamed up to elect two board members to Gateway Computer (old ticker:GTW) which was acquired by Acer last year. And while it’s highly unlikely the same fate will happen at the New York Times, given the two-classes of stock ownership, it is an interesting development. In addition to Galloway, Firebrand/Harbinger is nominating James Kohlberg, who runs private equity firm Kohlberg & Co., Allen Morgan, a managing director at venture fund Mayfield Fund, and Greg Shove, a former AOL executive who now runs a company called Helium Report in San Francisco.
I spoke to Greg, whom I know from his role at Helium, a short time ago, and while the conversation was off the record, it seems pretty clear that as far as these sorts of letters go, this one is pretty mild. (For a study in comparisons, see this letter that Chap-Cap sent to Sunterra back in June 2006).
Even the 13-D that Harbinger filed targeting Media General (MEG) on Friday, was much more business-like, though both letters seek essentially the same thing: electing several board members to each company’s boards. (Firebrand is not involved in the Media General fight).
Clearly, this will be interesting to watch.