Max Frankel: CassandraA new ‘Vanity Fair’ profile tells us how the former editor of the New York ‘Times’ was making canny predictions about how the Internet would change the company. Too bad nobody listened.
Son of Sulzberger to Return to New YorkArthur Gregg Sulzberger, the 28-year-old son of ‘Times’ publisher Arthur Sulzberger Jr., is leaving his job as a reporter at the ‘Oregonian’ newspaper to return to New York and the ‘Times.’
Vagilante Scott Galloway Crashes Onto ‘Times’ BoardHoly moly! We thought it would never happen. Arthur Sulzberger Jr. has loosened his viselike grip on the Times and agreed to give Scott Galloway a seat on the board. In case you missed it, Galloway (shown in a picture we can not get enough of) is a former ZBT frat boy who reportedly refers to himself a “vagilante,” and the founder of Firebrand partners, a hedge fund that, along with Harbinger Partners, recently amassed a 12 percent stake in the Times. The two groups were leveraging said stake to get four seats on the Times board; however, Sulzberger gave them only two. Still, the Times itself points out, this is the first time the family given seats to people nominated by outsiders since 1967, so it’s nothing to sneeze at. Galloway will occupy one of the two seats; the other will be occupied by James Kohlberg, the chairman of Kohlberg & Company, who was also nominated by Firebrand/Harbinger. Harbinger’s Philip Falcone, who recently bought Bob Guccione’s mansion, was not invited. The hedge funds have said that their aim is to get the Times to sell off some of its smaller assets (shares in the Boston Red Sox, the Boston Globe and smaller newspapers, and buildings like maybe even their headquarters) and focus more on digital media. Presumably, they also think they should drop the bridge column, but we’re just guessing.
Times Co. To Give Seats to Hedge Funds [NYT]
Earlier: Intel’s coverage of Scott Galloway
Sickos Behind Marketing for Airborne Were Lying to Us AllLEGAL
• Manhattan’s Tonic East restaurant will pay $35,000 to settle a lawsuit alleging that the eatery discriminated against blacks wearing hip-hop clothing and urban wear to a Super Tuesday event for Barack Obama supporters. [NYT]
• Office procrastinators might have to look for a new method for wasting time: Scrabulous is under fire. [DealBook/Alley Insider]
• Airborne, the cold-relieving drug of choice for many cube dwellers around the city, will pay $23.3 million to settle claims of false advertising. Says one critic, “Airborne is basically on overpriced, run-of-the-mill vitamin pill that’s been cleverly, but deceptively, marketed.” Holy wow. Anyone want to come together and ratchet this up to class-action against “second-grade teacher” founder Victoria Knight-McDowell? [CNN]
‘Page Six’ Manages to Not Revel in Sarah Jessica Parker’s Failure Sarah Jessica Parker is not confident that her unreleased movie, Spinning Into Butter, will ever see the light of day. Barack Obama and his wife are slated to attend the opening of Cat on a Hot Tin Roof with Oprah on Thursday. Cosmetics heir Olivia Chantecaille got engaged to banker boyfriend Ren Grady. Gossip Girl’s Blake Lively took a bunch of friends shopping to Armani Exchange on Fifth Avenue. Shake Shack is opening a location on the Upper West Side! Sting, Diddy, and Josh Hartnett all hung out at Half Nelson producer Charlie Corwin’s birthday at Socialista, which is now back open after the hepatitis scare. Michael Musto will appear on the cover of The Village Voice spoofing this magazine’s Lindsay Lohan shoot.
Troubled ‘Times’We’re feeling sort of bad for Pinch Sulzberger. Not only is the Times under attack by activist shareholders trying to place their own snatchbuckling vagilantes on the board in order to tell him how to run his business, he also has to deal with growing tension between the business and editorial sides over newsroom cuts he said last month were imminent. Apparently, the business side is acting all smug about the impending layoffs, since they think, a source tells Portfolio, “they’ve taken the majority of the hits so far while the newsroom has stayed untouched.” Meanwhile, the editorial side, more neurotic than ever, has got its back up about the effectiveness of the business side: “Are they doing all that they can to operate in such a way that the business could be profitable enough to pay for all that great journalism?” one Times source asks Portfolio, of the business side. But really, can’t they all just get along? “Having a big fat debate … while Murdoch’s saying ‘I’m going to take you out’ — tell me how that’s supposed to make sense,” a former Times exec beseeched Portfolio. “They ought to be looking outward, at how they can work together.” It’s enough to give anyone an ulcer. Or something more serious? “Page Six” reported today that Pinch has sold his wife their Central Park condo — for estate-planning purposes. Pinch is only 57! Does he think this is going to drive him to an early grave?
Strife at the New York Times [Portfolio]
Penny Pinch-er [NYP]
Pinch, Feeling the Pinch, Agrees to Meet With Harbinger NomineesArthur “Pinch” Sulzberger and the board of the New York Times have agreed to meet with four nominees being put forth by Scott Galloway, of Firebrand Partners, and his partner, Atlanta-based investment firm Harbinger Capital, Times spokeswoman Catherine Mathis confirmed to the AP today. Up until now, the board has declined a meeting with the activist shareholders — who earlier this month announced they’d like the Times to cut several small businesses from their portfolio and build up their online operations — and have essentially ignored the nominees they proposed adding to the board, swashbuckling former ZBT brother and Red Envelope founder Galloway included. This is likely because Sulzberger was thinking something along the lines of, “What the eff does an ex–frat boy b-school professor with a moderate-to-undistinguished investing record know about the newspaper business? Fuck ‘em!” But over the past month, the firm has amassed a somewhat terrifying 19 percent stake in the Gray Lady, and now, apparently, Pinch & Co. don’t feel they have a choice. The Times’ annual meeting is set for April 22.
N.Y. Times to Meet With Board Nominees [AP]
in other news
Arthur Sulzberger Slaps Back at Vagilante Hedge-FundersSwiftly after yesterday’s news that Firebrand Partners and Harbinger Capital Partners increased their ownership of the New York Times to nearly 10 percent, we learn that Arthur Sulzberger has made his nominations for the two empty seats on the company’s board. The two hedge funds were hoping to seat two of their own people on the committee, to steer it toward focusing on its core assets and developing its digital brands. To do that, they nominated four digital and financial gurus: AOL’s Gregory Shove; James Kohlberg, co-founder of the private equity firm Kohlberg & Co.; the Mayfield Fund’s Allen Morgan; and our favorite vagilante ever, Scott Galloway. The Times, in retaliation, nominated Drugstore.com CEO Dawn Lepore and former Salomon CEO Robert Denham. The hedge funds met with Sulzberger on Friday and urged him to have his nomination committee interview their candidates, but apparently Sulzberger was uninterested. In our inexpert opinion, the board should just vote to approve whichever new member will support more Britney Spears coverage. Because apparently that’s the only way to make money in print these days.
Sulzberger Strikes Back [Portfolio]
Related: Vagilante Shareholder Scott Galloway Takes on the ‘Times’, A Harbinger of Things to Come? Hedge Funds Increase Share in ‘NYT’
early and often
‘Times’ Endorsements Include a Pinch in the Bum for GiulianiOkay, so there was a debate last night. All of the Republican presidential candidates got together to chat about whom people should choose in the voting booth (we’ll have details for you later). But, see, you might not hear much about it because it didn’t really matter. Why not? Because the Times bogarted all of the primary discussion this morning with their unsurprisingly self-righteous endorsements. For the Democrats, they chose Hillary Clinton because they “are hugely impressed by the depth of her knowledge, by the force of her intellect and by the breadth of, yes, her experience.” (Don’t worry, though, they totally heart Obama, too.) And for the Republicans, they begrudgingly chose John McCain. Except it wasn’t so much an editorial supporting McCain as it was one attempting, once and for all, to obliterate Rudy Giuliani.
Warren Buffett Tries to Save Us All, Except Kate Moss, Who is DoomedFINANCE
• The credit crunch may take down high-flying real-estate baron Harry Macklowe, who bought $7 billion worth of midtown office space with a mere $50 million of his own money. Here’s a tip — when journalists start calling you “high-flying,” you know you’re in for a fall. [NYT]
• The man behind the biggest fund in New York may be state comptroller Thomas DiNapoli, the sole trustee for the $154 billion state pension plan. Most states use a multi-trustee board, and some are complaining that DiNapoli has too much power. [NYT]
• Warren Buffett, looking to cash in on the credit crunch, may buy failing Countrywide. Meanwhile, you still can’t buy an apartment. [DealBook/NYT]