Business

Ochs Sulzberger family members pressured NY Times management to restore dividends

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Less than three years after the New York Times Co. was forced to slash its dividend to save cash, members of the paper’s founding family pressured management to restore the rich payout.

Members of the Ochs Sulzberger clan are reportedly unhappy that the once-mighty and now struggling company has not been able to dole out the dividend, which was a major source of income for the family whose trust controls the company through a dual-class share structure.

Some family members had put pressure on Chairman Arthur “Pinch” Sulzberger, Jr. and recently ousted CEO Janet Robinson to reinstate the dividend, according to a new report.

In 2008, the last year a dividend was declared, it amounted to $20.8 million. The Times halted the payout as it raced to cut costs to offset slumping ad revenue.

While few of the family members actually work at the company these days, the dividends provided a lucrative source of annual income, which has vanished as the value of the stock has plunged.

Bloomberg News reported yesterday that family members “repeatedly pressed Robinson and Sulzberger to restore the payouts.”

Sulzberger and his first cousin, Vice Chairman Michael Golden, ousted Robinson from her job last month, according to the report, citing a person familiar with the situation.

Robinson also received an exit package worth about $21 million, which is higher than previous reports that had pegged it at $15 million. The full amount is likely to be revealed when the company files its proxy statement in March in advance of its annual shareholder meeting, according to the report.

The exit package for Robinson has angered the paper’s largest union, the Newspaper Guild, which has been without a contract since last spring.

“If it is true, it just adds more fire to the situation at the Times,” said William O’Meara, president of the Newspaper Guild, which is negotiating a new agreement at the Times for 1,100 union members. “People are very upset.”

Still to be resolved is who will replace Robinson as CEO — and what direction the company will take as it struggles to stay relevant in the digital world. For the moment, Sulzberger is running the company as interim CEO.

“I assume they are going to try for someone from outside and who hopefully has print and digital experience,” said Craig Huber, an analyst at Huber Research Partners, who has followed the company for 17 years.

But finding a new strategy won’t be easy.

“Excluding About.com, 87 percent of the newspaper division’s revenues are still print-related, and 13 percent are digital,” he said.

“Things are going to hinge on how print does for quite a while.”

Huber also said he expects more asset sales, adding, “I think everything at the company is up for sale at the right price, except the flagship newspaper.”

The company recently sold its group of 15 regional newspapers to Halifax Media for $143 million.