The New York Times Needs Bill Gates And He Needs Something To Do
After another bleak round of earnings that reported all divisions (circulation, advertising, other) declining in revenues, The New York Times (NYSE: NYT) needs help befitting that for an entity that sets the standard of excellence for The Fourth Estate. Fortunately, it is only a five-hour private jet flight away in Redmond, Washington. Here are the reasons why it's time for Bill Gates to become the new owner of The New York Times.
He is the logical choice
Not the best choice: that would be Warren Buffett. But Gates, a close friend and bridge partner of Buffett's, is the logical choice. At 83, Buffett, who loves newspapers and reads several daily, is simply too old. In addition, Buffett did not come to the rescue of The Washington Post. Though he was a board member, he did not purchase The Washington Post for the holdings of Berkshire Hathaway, as he has more than 60 other newspapers.
Jeff Bezos, Chairman of Amazon, bought The Washington Post, which is a mere shell of its former self. The New York Times is still a great, and profitable, newspaper, however. Buffett would have much invaluable advice for Gates as the new owner. Gates got Buffett to donate billions to his foundation, so he obviously has a great deal of influence with “The Oracle of Omaha.”
Gates loves the print press
For a software guy who did much to destroy it, Gates enjoys publishing in the print press. He has written a number of books. He frequently pens op-eds for newspapers. He recently had a huge piece in The Wall Street Journal. Owning The New York Times would allow for Gates to further the goals of his foundation. A major one is education, and a newspaper would be very useful.
In addition, he just resigned as Chairman of Microsoft (NASDAQ: MSFT) and needs something to do.
Gates is brilliant in every meaning of the word. Guys like him always need new worlds to conquer. Remember: he is the one who upset the Home Brew Computing Club back in 1976 for his actions to copyright his work product. At Microsoft, he had “Think Weeks” where he would retreat to read and write to hone his thoughts. He has considerable resources in every meaning of the word to bring to The New York Times, and the company needs it.
Getting out before it falls
It is widely accepted that the Sulzbergers will never sell The New York Times. Well, The Washington Post has been sold. And The New York Times sold The Boston Globe, at a great loss, too. As the takeover of Anheuser Busch by Belgium's In Bev clearly demonstrated, it is far better for an American icon that is controlled by a family to move forward with a responsible plan of succession than to let events overwhelm them.
Working with Gates, the Sulzbergers should be able to easily arrange for an orderly transfer.
Sure, controlling The New York Times is a great thing for a family. But it is a publicly traded corporation, so there is a fiduciary duty to the shareholders. The collapse of The Washington Post and The Boston Globe serve as telling, and costly example examples, of what can go wrong.
The Sulzbergers have borrowed money from Carlos Slim, among the richest in the world, in the past for The New York Times. So going to Gates now to structure an orderly transfer of ownership would be in the best interest of the shareholders. That cannot be said about the current leadership, which has led to the stock declining from around $50 a share to under $14 over the last decade.
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