When Arthur Sulzberger Jr. turned 60 years old, in September, the chairman and publisher of the New York Times threw a big birthday party at the Copacabana on West 47th Street in Manhattan. It wasn’t just a celebration for him but a kind of coming-out party for his new girlfriend, Claudia Gonzalez, an elegant and statuesque Mexican marketing executive who is a fixture at the annual World Economic Forum in Davos, her former employer. The invitation was from the two of them. To many guests, it was the first they’d seen of her. Sulzberger introduced Gonzalez to colleagues at the paper and to members of the Ochs-Sulzberger family, which controls the New York Times Company. Among the witnesses was Arthur’s father, the then-85-year-old Arthur “Punch” Sulzberger, who had handed the mantle of publisher of the newspaper to his son two decades earlier. In heels, Gonzalez stands a few inches taller than Sulzberger, and, looking glamorous in a red flamenco dress, she joined him on the dance floor as a rock and R&B band energized the crowd of more than 100 people.
By every account, Sulzberger, who separated from his wife in 2008, is madly, and conspicuously, in love, regularly leaving the Times for long absences to be with Gonzalez, a pedigreed jet-setter who works for a humanitarian-relief agency in Geneva called the Global Fund. She accompanied Sulzberger on parts of a world media tour to help advertise the Times as a global brand, a trip that doubled as a romantic getaway to places like Paris and Istanbul.
Few begrudged Sulzberger his happiness, except perhaps the other important woman in Sulzberger’s life: Janet Robinson, the chief executive he chose to run the Times Company in 2004. Robinson, according to former colleagues at the paper, was growing annoyed with what she saw as Gonzalez’s undue influence on her boss, his forays with her cutting into the weekly face time Robinson had grown accustomed to having with him over the years. Sulzberger and Robinson were once an executive version of a married couple, finishing each other’s sentences in meetings and panel discussions and reviewing the paper’s business over dinners. They were frequently in each other’s offices on the sixteenth floor of the Times’ headquarters. “Check with Janet” was Sulzberger’s frequent reply to executives asking for guidance.
Robinson, a former elementary-school teacher, had bootstrapped her way to the top of the Times masthead from the world of magazine advertising to become Sulzberger’s indispensable business partner. She helped him develop his most successful business stratagem: taking the Times from a regional paper to a national one in the late nineties. While many questioned her hard-nosed tactics as a corporate infighter, as well as some of her decisions, few questioned her commitment to Sulzberger. She was his loyal lieutenant, steeped in the details of the paper’s balance sheet and serving as an assuring anchor during proxy skirmishes with aggressive shareholders that rattled Sulzberger’s nerves five years ago.
And now Sulzberger was bringing Gonzalez into the mix, where, as his girlfriend, she gave him advice—including, many people at the Times believe, a critique of Robinson’s performance. The tension between Robinson and Gonzalez, with Sulzberger in the middle, seemed to signal a shift at the paper. The relationship between Robinson and Sulzberger began “cooling” through the period that Gonzalez was emerging publicly, say people familiar with the matter. And when Sulzberger fired Robinson in December, out of the blue, giving her an astounding exit package of nearly $24 million, some top executives at the newspaper thought that the influence of Gonzalez was decisive. It was a scenario that appealed to those relishing a catfight between “Arthur’s women,” but it is not quite the true story.
Interviews with more than 30 people who are intimately familiar with different aspects of the Times’ business (none but a spokesperson would speak for attribution—this is the paper of record, after all) have made it clear that Gonzalez’s rise and Robinson’s fall, and the ensuing leadership vacuum inside the paper, were symptomatic of larger forces at work. Even as a new pay wall was erected on the Times’ website last spring to charge customers for access, the company’s performance, including an alarming dive in print advertising when other media companies were beginning to recover, was faltering, and Sulzberger was under pressure both financial and familial to throw Robinson overboard.
As the paper’s stock price has declined in recent years, there has been increasing unease among the Ochs-Sulzberger clan, who control the paper through a special class of shares. Three years ago, facing huge debt problems, the company suspended the lucrative stock dividend that once flowed quarterly to the family’s 40-plus members, intensifying the need to solve the intractable advertising problems of the newspaper in the digital age and figure out a way to turn the family’s cash spigot back on. Janet Robinson, the company’s advertising brains, found herself caught between her increasingly remote boss and a frustrated family worried over the future of its 116-year-old fortune.
Last year, the Times made a big gamble to save its business, giving the newspaper and its leader, Arthur Sulzberger Jr., what seemed like a new lease on life. In March, it rolled out one of its riskiest business plans in years, the online pay wall that charges customers for access to the digital newspaper, which the Times hoped would be the foundation of a 21st-century media company.
This move came after tough austerity measures, including layoffs and buyouts, the sale of some of non-Times holdings, and the suspension of the stock dividend. With these measures, the paper had managed to pay off a massive debt to the Mexican billionaire Carlos Slim Helú, whose high-interest loan of $250 million had hovered ominously over the paper and for a few tense years led to speculation that the family might be forced to consider the unthinkable and sell the paper, possibly to Slim.
Last year, Robinson went on a media tour to cultivate advertisers and talk about the state of the paper’s pay wall, a business strategy she had personally championed against the protests of some powerful voices at the company. She began giving speeches and interviews, meeting with editorial boards at Bloomberg, Reuters, the Los Angeles Times, and CNBC, and with advertisers in Hollywood and Detroit. Occasionally she appeared with Sulzberger, but more often she appeared alone. At times, she seemed to be having fun: In a September interview, she teased Forbes by saying that she had a secret Twitter handle, but wouldn’t reveal the name.
On the same day the interview was published online, incidentally, the first major story emerged in the U.S. connecting Sulzberger romantically to Claudia Gonzalez. The site Capital NY linked to an article in the Mexican magazine Quién describing Gonzalez as the woman who “moves the New York Times.”
Robinson’s tour was prearranged by the Times’ public-relations office. Her interviews came during a difficult period when print advertising at the Times was vanishing, with movie ads the latest to take a hit. According to at least two people familiar with the matter, Gonzalez was critical of Robinson’s profile in the press. “It was her view that Arthur should be the face of the Times, not Janet,” says a former Times executive who maintains ties to the company. (Gonzalez declined to comment.)
For years, Robinson was happy to be an almost invisible force at the Times. She had begun in the eighties as a formidable salesperson for Tennis magazine, working her way up, tirelessly and deliberately, to head of print-advertising sales for the Times. Advertising, of course, was the battleground for the future of the newspaper business, and Sulzberger, who became chairman in 1997, adamantly wanted women in higher positions at the company. He gave Robinson the job as CEO in December 2004.
Over time, Robinson and Sulzberger became a close team. In a 2008 documentary about the restaurant Le Cirque, by the same filmmaker who made the Times documentary Page One, the two can be seen walking arm in arm to their table, a kind of glamorous platonic power couple clinking glasses of white wine.
Robinson appeared to her co-workers to have little private life: She was unmarried, called her mother nearly every day from her office, and on weekends took home boxes of work. Though she made enough money to build a house in Newport, Rhode Island, she rarely went there. “She gave him the impression, ‘Don’t ever worry, Arthur, I’ve got this, this is my life,’ ” says a former Times executive who worked with her. “He needs a larger-than-life person around him who is going to tell him everything is okay.”
Robinson’s calming presence allowed Sulzberger to concentrate on being the publisher of the flagship paper, meeting with President George W. Bush over the Times’ controversial decision to report on the government’s secret wiretapping program, or appearing on the Today show to defend the reporter Judith Miller during the CIA–Valerie Plame leak investigation. When the paper was in turmoil under executive editor Howell Raines, it was Sulzberger who famously appeared before a staff town hall to hand a stuffed moose to Raines, a device that was meant to get people talking truthfully about difficult issues.
Robinson consequently gained and consolidated her own power on the business side of the paper. A glance at today’s masthead of business management, opposite the opinion page, is a gallery of Robinson hires. She relished her authority, say former colleagues, earning a reputation for ruthlessness. She surrounded herself with allies who did not threaten her power, pushing out anyone who showed a hint of disloyalty. By 1999, one of Robinson’s most trusted protégés was a woman named Jyll Holzman, whom she had plucked from the magazine world and elevated to senior vice-president for advertising after effectively pushing out Sulzberger’s own cousin, Dan Cohen, from the position. During a period of tension between the newsroom and the advertising division, the Times’ then–deputy managing editor, John Geddes, represented the news and Holzman the advertising side. Robinson believed Holzman was championing their cause—until she discovered that Holzman had begun dating Geddes.
“She went nuts because she had been confiding all these poisonous comments about Geddes,” says a former Times executive who was there. “From that point on, she really ostracized Holzman, and Holzman had to leave.” (Geddes and Holzman married in 2005.)
She was especially keen to drive out people she saw as too influential with Sulzberger. To some, she had earned the nickname “Howell on heels,” the business analog to the onetime editor Raines, a legendary autocrat.
Complaints about Robinson’s style made their way to the board level of the company. During an executive meeting several years ago, Sulzberger’s half-sister, Cathy, then a board member, asked Arthur whether internal issues with Robinson had improved. “Arthur didn’t know what she was talking about,” says a person who was in the room. “It’s not because he doesn’t know. He’s in denial.”
When it came to resolving conflicts, Sulzberger abhorred confrontation. “He would get an earful [about Robinson] and would never do anything about it,” says another former Times executive. The feeling among some in the Ochs-Sulzberger family was that Sulzberger only heard what he wanted to hear; it was similar to criticism made of Sulzberger during the period that Raines was first antagonizing the newsroom.
Sulzberger, in effect, served as the firewall between Robinson and her critics. And as the company’s chairman of the board and the publisher of the paper, he didn’t have to listen. This power cut two ways, however. His commitment to the paper’s integrity was beyond reproach, many felt. But his management skills and business ideas were not. When he paid about $30 million for a software company called Abuzz Technologies that quickly imploded, or when he spent $2.7 billion to buy back company shares that then went down precipitously, or built a new headquarters that was worth half the present-day value of the company, he could appear arrogant and out of touch. Consequently, Robinson came to see herself as the paper’s caretaker, the adult in the room. (Some Times people privately referred to her as “the Nanny.”) Robinson sometimes complained that Sulzberger drove her crazy, says a former Times executive, but over time came to see herself as indispensable. Says another former colleague: “Her devotion to the company was so extreme that she believed she was the most important cog in the machine.”
But something changed after the launch of the Times pay wall last year, marking the beginning of what colleagues describe as a breakdown between Sulzberger and Robinson. Robinson had championed a paid model for nytimes.com against the protests of the Times’ digital guru, Martin Nisenholtz, a gentle but forward-thinking man in his fifties who is credited with developing the modern Times website and who believed the paper should remain free. The Robinson-Nisenholtz conflict dated back to the beginning of the Times online. “They fought constantly,” says a former colleague. “It was very, very unpleasant.”
Nisenholtz and his allies debated Robinson for years over whether and how to charge for content, with Nisenholtz in the free-content camp from the beginning. But where Nisenholtz was thoughtful and reserved, Robinson was aggressive and tactical, and in the struggle for power and influence, Robinson won. After the pay wall was launched, Nisenholtz told management he planned to retire at the end of the year. Friends say he was embittered by what he considered Robinson’s efforts to marginalize him, and his exit rippled throughout the company. (Friends of Robinson’s point out that Nisenholtz later thanked her for her support at a retirement party.)
Robinson, for all her virtues as a decisive executive, was a saleswoman from the legacy print paper and not a particularly inspiring presence for the younger set rising in the paper’s digital ranks. But she felt she had been the one to execute the paper’s most important digital strategy so far. And she had been a strong advocate of the paper’s other big digital play, the Wikipedia-like information-and-advice website About.com, for which the company had paid $410 million in 2005. Though it was never a very sexy component of the Times empire, About.com had produced needed advertising cash flow when the paper was struggling under debt obligations and two large shareholders, Phil Falcone of Harbinger Capital Partners and Scott Galloway of Firebrand Capital, were pressuring Sulzberger to loosen the family’s grip on corporate governance.
It was Nisenholtz, Robinson would argue, who had allowed About.com to be driven onto the rocks by a CEO he had hired named Cella Irvine. Irvine was evidently caught off guard when Google reengineered its search engine last February to lessen the prominence of “low-quality” websites, drastically cutting About.com’s traffic. Now, according to a company filing in 2011, About.com could be headed toward a write-down, rendering it worthless.
With the success of the pay wall in the summer of 2011, it seemed the paper was turning a corner—which made what came afterward even worse. Between the About.com debacle and the sudden decline in print advertising, the paper was headed toward a 3 percent drop in revenue and an overall loss of almost $40 million in 2011. Since Robinson began as CEO in December 2004, the Times stock has lost more than 80 percent of its value. And this was significant not only for the business but also for the family that owns it. The Times has always had conflicting business prerogatives: to turn a profit, yes, but also to supply the family with what amounted to a trust fund by churning out several million dollars a year in stock dividends. At one time, the family received upward of $20 million a year, which served as a kind of Ochs-Sulzberger operating budget. But when the dividend was suspended, the family were left with only their stock wealth and whatever they had in trust funds and savings. That was fine for Sulzberger and the five other family members with salaried positions at the company, but the wider family of sons and daughters, nieces and nephews were now forced to sell stock at a historical low to raise money. Most of them have admirable if low-wage jobs as academics, novelists, musicians, and psychotherapists, but the money also funded second homes and hobbies such as underwater exploration. Two years ago, the clan began working with a company called Relative Solutions, which specializes in brokering disputes inside wealthy families. The latest proxy statement by the company shows that the Ochs-Sulzberger-family holdings have been reduced to 15 percent of Times stock, down from 18 percent last year.
To turn the financial corner, the Times has been off-loading struggling properties from its portfolio to raise cash, bailing on its investment in the Boston Red Sox and selling its group of regional newspapers, which the Times wrote down as a $161 million loss in 2011. Three years ago, the Times tried selling Boston Globe, its sister paper, but was unable to find a deal. Last year, the company began debating whether to try again.
This matter, it turns out, was the hinge point at which the Times’ business failures, the family tension over the dividend, and the Nisenholtz and Gonzalez affairs would all conspire to isolate Sulzberger and force Robinson out. In the past, Robinson had resisted selling the Globe. She wanted to wait until the Globe’s new pay wall, which launched last fall, took effect and possibly improved the paper’s sale value. “Janet was the leader of the group that didn’t want to sell it, and because she was boss, her voice carried,” says a person familiar with the situation.
But there was another significant voice rising in the debate—that of Michael Golden, Arthur Sulzberger’s first cousin. As the second-most-powerful family member at the Times Company, Golden had run just about every division except for the Times itself, from the women’s magazines it used to own to the Paris-based International Herald Tribune—and, most recently, its regional media group. An affable man with curly hair and a trace of southern drawl from his years growing up in Chattanooga, Tennessee (where his mother published the Chattanooga Times), Golden was much more accessible to Times executives and other family members than Sulzberger. A large shareholder of the Times Company’s class-B stock, he served as a counterweight to his cousin, an interlocutor between Sulzberger and the rest of the family, who, except for two other members who sit on the board of directors, have no say in business matters. “His unspoken job is family relations,” says a person who knows him.
Golden, though well liked, also suffered from the perception that he was a dilettante with a weak business mind. He could get overly obsessed with details, say people who have worked with him, and miss the larger point. While overseeing the construction of the Times headquarters, he forgot to include the cost of paying off the debt in a budget he submitted and caused some embarrassment.
Nonetheless, he had never resigned himself to playing second banana to Sulzberger, and he chafed, as others did, at Robinson’s authority. “He has always been looking for a bigger role and always felt subordinate to Arthur,” the source says, “and thought Janet had too much influence with Arthur.”
For her part, Robinson saw it as part of her management job to keep Golden safely at bay while she took care of the details for Sulzberger. She was, after all, his virtual left arm, and Sulzberger enabled her, according to a person who witnessed it, by openly dismissing Golden in conversation with colleagues.
Among senior executives at the Times, it was understood that any decision had to be discussed with Robinson before it was telegraphed to Golden. “Whatever conversation you had with Michael, you had to have with her first,” says a former colleague who worked with both people.
But last fall, as he was helping finalize the sale of the regional media group, Golden found himself without a property to run at the paper. In the past, when he was temporarily without a job at the company, Golden let people know he was restless and unhappy. “He was frustrated and wanted to do a lot more,” recounts a person to whom Golden once confided.
Since Sulzberger ran the flagship Times, that pretty much left the Boston Globe. In Golden’s estimation, Robinson had not pushed hard enough to sell the paper, and he wanted to see it sold sooner rather than later. Since the economy had collapsed in 2008, Golden and others had begun to wonder if Robinson had missed a window to sell when the Globe and About.com were worth a combined estimated $1 billion. And there was another possibility: Once those properties were finally gone, Golden could make a play for CEO himself, pushing Robinson aside. In addition to giving Golden the power he felt was his due, eliminating Robinson would also cut $6.8 million in salary from the company’s balance sheet. And if the Globe was sold, perhaps the Times could raise enough cash to pay down its debts and afford a $25 million annual dividend again, assuaging the family’s financial anxieties.
Last fall, Golden wanted to take a closer look at the incoming numbers on the Globe’s pay wall, which launched on September 12, 2011, to see what progress it was making. But Robinson, according to people familiar with the matter, had instructed the Globe’s publisher, Chris Mayer, to direct any information about bostonglobe.com to her and not to Golden. As one Times executive told me, it looked like Robinson was “making a move against Michael.
“Once the situation involved a family member,” this person told me, “it became a true liability.”
That put Sulzberger in a difficult position. By crossing a sacred family line, Robinson gave Golden the opening he needed to assert himself. Golden, an agent of his family’s unhappiness, and a man looking for a larger role, became directly involved in Robinson’s exit. In the past, Sulzberger had the authority to keep Golden and the rest of his family at arm’s length. Now, with the business struggling and his absences very much a matter of internal discussion, he was no longer in a position to protect Robinson—and, maybe just as important, he had lost the will to do so. His girlfriend didn’t like her. He had lost his digital guru because of her. And now his cousin wanted her gone, too. Sulzberger was up against the wall.
In early November, Golden and Sulzberger made the decision together to fire Robinson. Sulzberger retained Richard Edelman, a PR man he had used for crisis-management jobs in the past, in particular the Judith Miller contempt-of-court situation in 2005. Edelman’s team decided Robinson should be ushered out immediately, before a new leader was in place, and surmised that the impact of the news would be muted by the sale of the Times’ regional media group, which was just then being finalized.
And so it was on the morning of December 9, before 7 a.m., when the offices were virtually empty, Sulzberger called Robinson in and told her she was dismissed. She left the paper’s headquarters and never returned.
To this day, Robinson tells colleagues she doesn’t understand why she was fired. The Times’ own story of her exit called it a retirement. If Robinson’s ouster came as a shock to her, it was even more shocking for the employees of the Times when they found out six days later. The news led to a wave of anxiety and antagonism at the paper, especially after it was revealed that her exit package amounted to almost $24 million, nearly half the company’s profits in 2011.
When Sulzberger informed the board of directors of his plans, there was strong dissent from at least two members who didn’t agree with Robinson’s firing. Sulzberger, with Golden and the two other family members on the board, didn’t have to listen because together they controlled the board through their special class-B stock shares. The board’s compensation committee, led by David Liddle, a Silicon Valley executive known to support Robinson, sought guidance from an outside law firm on Robinson’s exit package. Motivated by what amounted to guilt over Robinson’s firing by the Ochs-Sulzberger family after 28 years at the company, the committee agreed to give her the maximum amount recommended by the outside firm. In essence, the payout was a protest that expressed the daylight between the powerless independent board and the family members who forced Robinson out.
About $11 million of Robinson’s exit package was from her pension and retirement plan. Another roughly $7 million consisted of her yearly compensation and awards, and stock options she was entitled to after her years at the Times. But she also received a $4.5 million consulting contract, a kind of gratuitous bonus that didn’t look or smell right to anyone who was toiling on Eighth Avenue and worrying over pensions in danger of being frozen in ongoing labor negotiations. That payout has since become the centerpiece of rancorous disputes between the Newspaper Guild of New York, the newsroom’s union, and management. The intense discussions are still in progress as of this writing, hung up on a suggestion made by the Guild to redesign the Times’ pension system.
In the era of Arthur Sulzberger Jr., when newspapers have flailed under new digital realities, the New York Times Company has shrunk dramatically. Once it was a wide-ranging media empire of newspapers and TV stations and websites, and even a baseball team, that was worth almost $7 billion; today it’s essentially two struggling newspapers and a much-reduced web company, all worth less than $1 billion (for comparison, consider that the Internet music company Pandora is valued at almost $2 billion). Despite the shrinkage, the company has retained essentially the same top-heavy management, which it has kept well compensated. Even though the paper froze executives’ pensions in 2009, as it is threatening to do with union employees, the company created two loopholes, called the Restoration Plan and the Supplemental Executive Savings Plan, which allowed certain high-earning executives to take money out anyway. As a result, Janet Robinson received an additional lump-sum payment of over half a million dollars upon exiting the Times.
Over time, there was less and less for Robinson, and Michael Golden, to manage. It was inevitable, say veteran Times executives, current and former, that the two would come into conflict as their respective portfolios disappeared and the struggle for influence over the tinier island of the New York Times came to a head. And with Robinson gone, Golden has indeed found a new property to run: the Boston Globe, which began reporting to him earlier this year. There are already rumblings that potential buyers are being sounded out.
It raises the question of what the next CEO of the Times will be running when he or she shows up, and how much authority and power he or she will have under the thumb of the family, led by Sulzberger, who, in the pretzel logic of the Times’ management structure, will be both his or her boss, as chairman, and his or her underling, as publisher—a situation that denies a leader any real authority. As one former Times executive asked, “How are they going to recruit somebody in that environment who is going to have to deal with Arthur?”
As of this writing, the Times is nowhere near finding a new leader. The board of directors only finished approving the job description for the new CEO in April, the month after it hired a search firm to find an outside candidate. In January, a Bloomberg report by Edmund Lee and John Helyar said that it was “unlikely the 62-year-old Golden will take on that role,” implying he was in contention for CEO. And if he were indeed campaigning to lead the New York Times Company, it might explain why it took nearly three months to hire a search firm to look for a new chief executive.
Meanwhile, the company is in the hands of both Golden and Sulzberger, who must handle the furor over company pensions. There is so much antagonism among the rank and file in the newsroom that Sulzberger’s leadership, long a subject of private grousing, is being openly questioned in ways nobody could have imagined a few years ago. In a leaked memo, reporter and Times Guild representative Donald McNeil described how Sulzberger had rotated through a series of questionable management gurus over the last twenty years.
And now, he wrote, “Enter guru No. 4,” a man he identified as Michael Useem, whom Sulzberger would soon be joining in the Himalayas in May. “Shouldn’t a 60-year-old corporate chairman already know whether he’s a leader or not?” asked McNeil. “Shouldn’t that have been decided by age 35 or so? And a trek now? In mid-crisis?”
But that may explain Sulzberger’s attraction to Useem, a management professor from Wharton business school who specializes in crisis management. A recent article he co-wrote is titled “How to Lead During a Crisis: Lessons From the Rescue of the Chilean Miners.”
With the company coffers shrinking, there is fear that the pressure on the family and the lack of adequate leadership are coming to an inflection point, not unlike what happened to The Wall Street Journal in 2007, when divisions inside the Bancroft family that owned that paper allowed Rupert Murdoch to divide and conquer with a massive offer that simply could not be refused. As with the Journal, the low stock price of the Times makes the company vulnerable to protests by stockholders, who could, if such an offer were forthcoming, at the very least bring expensive legal action against the paper if it resisted and further tempt an already anxious family to sell the paper.
That has led to speculation, and not for the first time, that Mayor Bloomberg, a long-fabled white knight for beleaguered Times staffers, could swoop in and save the paper from itself, a kind of best worst-case scenario for the Ochs-Sulzberger family. Here, after all, would be the decisive leader the paper yearned for, a powerful and wealthy businessman who has shown ample commitment to the city that gives its name to the greatest newspaper in the world. In theory, this benevolent dictator could afford to lose money for the greater good of journalism in America.
Bloomberg LLC wouldn’t comment on whether the mayor would make a bid for the New York Times. As it stands, there are no talks happening.
At least not yet.