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June 15, 2003
David Warsh, Proprietor


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Why It Matters

Now that the two top editors of The New York Times have “resigned,” attention has shifted to the man who hired and maybe fired them, Times chairman and publisher Arthur Sulzberger Jr.

Last week Sulzberger was giving interviews to deny that he had sacked executive editor Howell Raines and managing editor Gerald Boyd, or that he had been under pressure from his family to do so — an almost-certain signal that in fact privately he had been feeling heat, and that the temperature could be expected to increase.

Sulzberger, 51, has been publisher of America’s foremost newspaper for more than ten years now, chairman of the New York Times Co. itself since late 1997. It has been a period of generally buoyant share prices, but growing editorial instability.

The Jayson Blair episode, in which a young reporter, favored and protected by the paper’s editors, was revealed to have been faking his stories, was little more than a lightning flash. What it illuminated was a dangerous situation — one that affects not just the newspaper and the company that owns it, but the newspaper industry itself.

Consider a brief cautionary tale — about the potential of a destabilizing personality to wreak havoc in a changing business.

* * *

In the early 1980s, Boston’s venerable banks were known jocularly among themselves as Big Daddy and Seven Little Children — Big Daddy Being the proud old First National Bank, incorporated in 1783 and busy two centuries later restyling itself as the Bank of Boston, in anticipation of interstate banking. In 1984, the most spirited of the children — New England Merchants’ Bank — merged with Connecticut Bank and Trust to become Bank of New England.

Roderick MacDougall, the presumed architect of the deal, left almost immediately to become treasurer of Harvard University. MacDougall became ill and, in November 1988, died. CBT’s Walter Connolly, meanwhile, arrived from Hartford to take over the new bank.

Connolly was almost completely unknown in the Boston of the 1980s, even though he had grown up in suburban Brookline in the 1940s and had sold hotdogs at Fenway Park before attending Yale and making his career in Connecticut.

Almost completely unremarked, at least at first, was his class-based, family-bred hatred of the Brahmins who ran old Boston’s First National with a heavy hand. (Connolly’s father had started a small stock brokerage on Federal Street.) Returning home, Connolly was determined to overtake the Bank of Boston, using the frontal assault tactics he had taught as a Marine Corps drill instructor during the Korean War.

The profane and hard-drinking Connolly thereupon sent his officers on a lending spree, one that in short order found them pleading with developers to take more money. Barely knowing what was happening, unable to resist the imperative to meet the competition, Bank of Boston followed suit. By the time the recession hit in 1989 — and the bank examiners arrived — superfluous development littered New England.

The ensuing crash broke Connolly’s own bank altogether, and a few years later drove the crippled Bank of Boston into the arms of Fleet Bank of Rhode Island. Rhode Island’s other bank, Citizen’s Bank, took over what remained of the Bank of New England.

Ten years was all the longer it had taken to destroy Boston’s banking sovereignty.

The story of Walter Connolly is a classic example of what can happen when a hyper-ambitious chief executive goes for broke in an industry that is rapidly restructuring. This is the situation that threatens now at The New York Times, where the challenge facing Sulzberger to respond to the relaxation earlier this month of the Federal rules against media cross-ownership is far greater than the newsroom troubles that have attracted so much attention.

* * *

Anyone who wants to understand the Times should make a beeline for The Trust: The Private and Powerful Family Behind The New York Times. There, the saga is laid out in more detail than you want to know. The book was written by the husband-and-wife team of Susan Tifft and Alex Jones in loose connection with the hundredth anniversary of the purchase, in 1896, of the newspaper by the Adoph Ochs, patriarch of the Ochs/Sulzberger clan.

Not only is Jones himself a member of the fourth generation of a Tennessee newspaper family, still active in the business. He is a former New York Times reporter, winner of a Pulitzer Prize for his newspaper articles about the collapse of the Bingham family and the surrender of its Louisville Courier-Journal to a newspaper chain, and, with his wife, the author of a subsequent book on the Bingham dynasty.

Jones and Tift conducted 550 interviews for The Trust. Nearly everyone in the now-quite-complicated Ochs/Sulzberger family talked to them, usually with a good deal of candor. The result is a riveting and revealing portrait of what probably is the most successful remaining family-run enterprise in America — as well as a striking affirmation byall concerned of belief in the value of a free and open press.

Arthur O. Sulzberger Jr. is the fifth member of his family to serve as publisher of the paper, and for present purposes his story begins with the painful and embarrassing separation of his parents in 1955, when he was barely four years old. His grandfather, Arthur Hays Sulzberger, was then the paper’s long-serving publisher. His father, already widely known as “Punch,” was serving as a reporter in the Paris bureau. His mother, Barbara, began an affair with a reporter for a rival newspaper.

Unable to resolve her differences with her husband, Sulzberger’s mother accepted a divorce and took Arthur and his younger sister Karen to live in Manhattan, in somewhat straitened circumstances in the shadow of her former husband’s wealth and power. Punch remarried and had two more children. So did she. Arthur saw his birth father weekends.

The contrast between the two households was striking, family members told Tifft and Jones. Money was of no consequence to the Sulzbergers; but Arthur was required to split an entrée with his sister when his mother and stepfather took them out to dine. Tifft and Jones write: “Arthur Jr. was small and slight for his age, afflicted by allergies, subdued and lacking in confidence.… He was always the last chosen in pickup games of baseball; running bases, he was inevitably tagged out. The experience left him with a life-long distaste for team sports — ‘any game with rules,’ as he put it.”

The separation from his father produced in the son a powerful yearning “to claim his rightful place in the extended Sulzberger clan,” according to Tifft and Jones. His determination only increased after his father unexpectedly ascended to the publisher’s job, with the sudden death in 1963 of Punch’s brother-in-law, Orvil Dryfoos.

So in 1966, young Arthur quit his Connecticut boarding school, moved in with his father and enrolled in New York’s Browning School, where he quickly joined the student newspaper. He spent the summer before his senior year in North Carolina’s Outward Bound program, a copy of “The Fountainhead” the only book in his knapsack.

Though plagued by many early doubts, his own and others’, Punch Sulzberger proved to be a highly successful publisher. In 1969, he took the paper public, carefully preserving family control with a second tier of voting stock. He used the newly created shares to make a string of mostly successful acquisitions. By the time the Times published the “Pentagon Papers” on his watch in June 1971, his son was an undergraduate at Tufts University in suburban Boston, working hard on the college newspaper. (Three other Sulzberger cousins were there as well.)

There Arthur was arrested twice at antiwar demonstrations. After the second time, the young activist memorably told his father, a former first lieutenant of Marines, that were a single American soldier to come upon a single North Vietnamese soldier, he would prefer that it be the American who was shot. “It’s the closest he’s ever come to hitting me,” Arthur Jr. later recalled.

* * *

Arthur Sulzberger Jr. started real newspapering not long after graduating in 1974. Thereafter, Jones and Tift recount his rise — a successful marriage, a couple of years as general assignment reporter and production and advertising trainee on The Raleigh Times (owned by a friendly family), a couple more in London with the Associated Press, then, in the fall of 1978, a job in the Washington bureau of the Times.

There he began dressing in the manner of Washington Post editor Ben Bradlee, in bold shirts and bright suspenders. Fatefully, he spent the autumn of 1980 traveling with the campaign of vice-presidential candidate George Bush — an assignment that seems to have produced no lasting affection on either side. Bureau chief Bill Kovach warned him not to play favorites among the reporters who befriended him in the bureau. Nonertheless, his gang there has, in certain ways, ridden on his coattails ever since.

At a certain point, Arthur Sulzberger Jr. won over his distant father to his side. As much as anything, presumably, this was a result of the constant stream of low-level deliberation among Punch and his three sisters who, in effect, owned the paper (through their control of around 85 percent of its voting stock).

Which of their thirteen children might be capable of eventually taking over from Punch the management of the family business at a certain point? The search for right combination of will, temperament and intelligence in due course led to Arthur, with his cousin Michael Golden the leading alternative, and several other ambitious members of “the cousins’ generations” less fully involved in the business.

Throughout the book, the adjectives and descriptive phrases pile up. “Cocky and confrontational.” “Methodical and disciplined.” “Picked on and maybe isolated” (at the Advanced Management Program of the Harvard Business School.) “An arrogant phony.” One Times executive told Tifft and Jones, “He can’t just accept who he is and that he is where he is because of who he is. He wants to deserve it.”

As 1990s began, decisions about leadership had to be made. Iphigene Ochs Sulzberger, The Times grand dame and mother of Punch and his three sisters, died in February 1990. Punch turned 65 the next year. In January 1992 Arthur Jr. was named publisher — but only after the company’s directors had tabled his proposed appointment out of concern for his “seeming immaturity and lack of leadership.”

A second attempt to dethrone Sulzberger — by outside members of the board, led by Louis Gerstner of IBM Corp. — was fought off in 1996. An in-house rival, Times Co. president Lance Primis, was deposed.

And when in 1997 he was named to succeed his father as chairman of the board, his aunts and cousins insisted that Russell Lewis, a non-family member, be give the third important title that Punch previously had held, that of chief executive officer of the company. Cousin Michael Golden was named vice chairman of the board as well.

Within eighteen months, Sulzberger Jr. fired one cousin from the business and accepted the resignation of another. Only Michael Golden remained.

The namesake who had been so dramatically displaced from the newspaper family at the age of four had reclaimed his central position in it. The insecurity, however, remained.

* * *

After becoming publisher in 1992, Sulzberger launched a frenetic effort to transform the newsroom in his own image. “He was like a silversmith,” wrote Tifft and Jones, “noisily banging The New York Times into a shape that reflected his own values, beliefs and personality.” His self-proclaimed “revolution” took many forms, including the fractious drafting of a “mission statement” and an ill-starred flirtation with the Total Quality Management fad.

But his most visible early move was to create a Sunday “Styles of the Times” section — a new section wrapped around the famous old wedding announcements that quickly became a laughing-stock for its in-your-face celebration of gay lifestyles and extreme fashions.

After two years, the section was conspicuously killed. But Adam Moss, the consultant who had invented it, was assigned to redesign the Sunday magazine. (He has since turned it into a fabulously profitable operation.) And several years later, Sunday Styles itself reappeared, still attitudinous but considerably toned down.

Meanwhile, Sulzberger made two key appointments. Joseph Lelyveld, a veteran correspondent and one of the most respected editors in the newsroom, was named executive editor of the paper, And to sharpen up the editorial page, to give it a more distinctive voice, one that “echoed his own confrontational personality and outspoken views,” he chose Washington bureau chief Howell Raines.

In general, the paper sparkled in the 1990s, as it added color photographs and graphics and rapidly expanded its national edition. But there were two conspicuous exceptions to its customary evenhanded coverage of the news.

For several years, the Times took an uncharacteristically aggressive interest in the so-called Whitewater scandal, sending teams of investigative reporters to Arkansas, becoming absorbed in the widening investigation, renouncing its enthusiasm for attacking the president only when the impeachment process itself became imminent.

Then, after the Senate trial failed, the paper crusaded for a time against the dangers of Chinese espionage — pursuing the possibility that the Clinton Administration had been lax in defending American interests. Veteran news reporters often were puzzled by the Times celebration of “edge” in those years.

Eventually the paper published a long “Editor’s Note,” critical of its own coverage of the prosecution of government weapons scientist Wen Ho Lee. But the furious competition between the Times and the editorial page of The Wall Street Journal in those years in their coverage of other accusations against the administration on these matters has received relatively little attention.

Only when historians turn their attention to the editorial arms race that unfolded between The Wall Street Journal and the Times on these and other hot-button issues of the 1990s and 2000s will we learn more about the role played in them by Arthur Sulzberger’s determination to make his mark on history. But as the cautionary tale of the Boston banks suggests, it is a legitimate question, well worth considering. Indeed, the future well-being of each paper may depend on its ability to resist intemperate dares.

Alas, here even the very best reporting has its limits. Tifft and Jones’ otherwise wonderful book, of which the stories here are the merest sample, turns cautious, credulous and sometimes even ingratiating in its judgments about the current publisher.(“Arthur Jr. had earned his stripes the old-fashioned way.”) And why expect it to be otherwise with an authorized biography? It is the current publisher, after all, on whom the authors’ continuing access to the family and the newspaper staff largely depends.

About Sulzberger’s manners as a businessman, however, information is more widely available. Less than two years after taking over as chairman, Sulzberger reneged on his father’s “moral commitment” to retain family management made when The Times bought The Boston Globe in 1993.

He became swept up in the excitement surrounding the dot.com bubble and in 1999 almost spun off the company’s Internet operations as a “tracking stock” — narrowly averting embarrassment only after the newsroom dug in its heels over plans to enrich a handful of insider executives.

He discourteously forced The Washington Post out of a partnership operating the International Herald Tribune in Paris — even though, as Post columnist David Broder has written, it was a generous Katharine Graham who invited the Sulzberger family to join her as joint owner of the distinguished newspaper in the first place.

Such is The Times new aggressiveness that The Wall Street Journal took note of it earlier this year in a front-page article headlined, “New Edition/ Times Co. Strikes a Tougher Stance in Business Deals/ A More Aggressive Sulzberger Pushes New York Paper On Cable and Overseas.” Journal reporter Matthew Rose explained, “Times executives say they’re trying to make their once-neglected business side the equal of the company’s respected newsroom.”

This is the situation that obtains today. With the relaxation earlier this month of the US government’s regulations against simultaneous ownership of print and broadcast media in the same geographic markets, the New York Times Co., like other big media companies, is at a momentous crossroads. It has made considerable investments in television, but there are indications that its plans to produce programming are not going well. Should it seek to become a cable television company? Or concentrate on buying broadcast stations where its newspaper properties are strongest?

Meanwhile, business columnist John Ellis has floated an old rumor. Might The New York Times Co. seek to buy the struggling Knight Ridder chain of newspapers? To do so would be to greatly extend its core business of print journalism, and through its distribution possibilities, buttress the position of the Times as national newspaper. If so, what might they sell to raise the cash? Who will replace chief executive officer Russ Lewis if he retires, as expected, next year?

Above all, will Arthur Sulzberger’s father and aunts and cousins, who control the paper through their ownership of equal shares in a voting trust, continue to indulge his passion to reshape the Times in his own image? Will they permit him to run the company itself, and chart its course despite his lack of business experience?

All this is a good deal more far-reaching than the peculiar indulgence shown a young reporter who apparently was suffering from a bad case of bipolar affective mood disorder, at least some of the time.

So never mind Howell Raines. It is not too much to say that The New York Times itself has turned into one of the most interesting business stories in America.

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