It is one thing for the New York Times to endure criticism from the likes of bloggers and talk show hosts. We can be dismissed because, despite our growth, we lack prestige, tradition, and clout — especially within the liberal bubble. But when certain Wall Street investment houses talk, as the old TV ads put it, "people listen"

Morgan Stanley has issued a research report on the New York Times Company, which indirectly slams the management of Arthur "Pinch" Sulzberger, Jr. Here are some excerpts, within the fair use copyright limitations:

In 2005, NYT was the worst performing newspaper stock, dropping over 35%.  Since hitting a peak in 2002, the stock is down nearly 50% and is the worst  performing newspaper stock by some margin over the past three years.  Since peaking  in 2000 at 25.1%, the EBITDA margin of the company is expected to come in around 17.5% in 2005. [....]

...as largely depicted in a recent New Yorker piece by author Ken
 Auletta, recent stewardship of the Times is not without its internal detractors [....]

The NYTs immunity largely derives from the iron—clad lock on Board control by virtue of the familys almost 740,000 shares of Class B stock and its right to elect 70% of the Board.

However, particularly in light of the daily litany of outrage put forward by some of its journalists on corporate malfeasance, when is the house made of glass? [emphasis added]

We believe the private market value of NYT could be in excess of $40/share [versus a close of 27.11 yesterday — ed. emphasis added] based on historical transaction multiples and our discounted cash flow analysis.

For well over a year, we have been stressing that shareholders of the New York Times Company are ill—served by the management led by Pinch. Certainly, the value of their investment has been pinched by the Sulzberger clan's voting for blood, not competence, when they elect Cousin Pinch publisher.

The incalcuably larger loss is the destruction of the value of the brand franchise. As information becomes the predominant source of value—production in the new economic era we inhabit, the value of the New York Times brand name could skyrocket, and launch new platforms in the new media. Instead, it is being destroyed, as the New York Times, Boston Globe, and other properties degenerate into propaganda organs, instead of valuable sources of news. The Discovery/Times cable channel has not exactly ignited viewership or advertising revenues, for example. Just as the opportunities are greatest, the New York Times Company is squandering its greatest asset.

Hat tip: Ed Lasky

Thomas Lifson  1 04 05

UPDATE: Our Poet Laureate Russ Vaughn sends a link to this chart of the NYT Company's stock price.