The NYT covers itself, but not with glory

Today's WSJ discusses a recent ISS report that is highly critical of the NYT and its dual-class stock structure. I don't imagine that Gretchen Morgenscreed will be quoting this report as she does other criticisms by the corporate governance industry of companies that are unfriendly to shareholder democracy.

The NYT does cover the report. Its coverage is most interesting for what it leaves out. So let's begin with the WSJ report:

ISS also said the company hasn't provided "compelling evidence" that its stock structure ensures journalistic independence, a rationale used by other newspaper companies -- including Dow Jones & Co., publisher of The Wall Street Journal -- that have similar dual-stock structures.

The Times says:

Media companies have resisted giving up dual-class structures because of the insulation they provide against outside pressure.

Nothing here about whether this "insulation" accomplishes anything -- which I, too, have questioned.

Meanwhile the NYT's Floyd Norris reports twice on the Tribune deal – one as premium content opinion, the other as reporting. In the opinion piece, Norris criticizes the tax aspects of the deal and adds these two comments:

The deal is absurd * * * because those who will lend the money to the company are taking on equity risks if things go wrong, but will not get equity benefits if they go right. * * *

To those of us who care deeply about the future of newspapers, this deal is encouraging. At long last, someone without an existing tie to the industry has stepped up to say he sees value in it.

The stories provide some evidence of current NYT editorial policy. Consider:

• The dubious nature of Norris's combined roles. The Times has repeatedly done this with Morgenson as well, though it obviously can confuse readers about what is "fact" and what is "opinion."
• The confusion is particularly egregious for this story, where Norris is reporting on his own industry and job, giving special reason to stay clear of any hint of bias. That's not just an abstract concern here. Note Norris' slant. He's worried about employees bearing too much of the risk, and about the tax break that encourages the heavy reliance on ESOP funding. This, as an employee of a paper that might someday be subject to a similar deal if Congress doesn't provide a "fix." Norris also suggests that the deal is "encouraging" about the future of his industry. I came up with exactly the opposite assessment yesterday.
• The curious omission from the NYT self-coverage of a key element of the ISS report dealing with the "independence" justification for dual class stock – something the WSJ included despite its own vulnerability on that front.

Sadly, the NYT is rapidly shedding its reputation for fair reporting. In an environment of increasingly vigorous competition among many news sources, this is an asset the Grey Lady can ill afford to divest. Before things get worse, the Times desperately needs its own version of Sam Zell. Unfortunately, Norris's writing suggests that that brave soul will have to run the gauntlet of NYT journalists.  But chances are they won't have much credibility by then.

Comments

[Joe Bingham]

I'm grateful when the Times uses the same writers for its editorial and news pages. It combats the illusion of separation that might not be so apparent were completely separate staffs producing the pages from the same editorial perspective.

[Robert Schwartz]

"Sadly, the NYT is rapidly shedding its reputation for fair reporting."

That horse left the barn quite a while ago.

BTW. I think mez lenders who do not get warrants are leaving too much on the table, but a fool and his money ...