The New York Times and Janet Robinson’s $24 Million Exit Package

New York Magazine has a lengthy, fascinating article – yes, even tantalizing, if, like me, you follow the business side of media and were once a NYT Co shareholder – in the current issue on the inside process by which Janet Robinson, the ex-NYT Co CEO, was forced out in December 2011. Fired, however, with a goodbye kiss of almost $24 million, which, according to the article, was “nearly half the company’s profits in 2011.” Writer Joe Hagen says he interviewed more than 30 people “intimately familiar with different aspects” of the Times’ business, none of whom would talk for attribution – not surprising, but then leaving the reader in the position of essentially having to take the reporter on trust.

It’s a heck of a good read, and I suspect pretty much true overall, whatever quibbles other insiders might have over the details. Particularly so in its insider accounts of conflicts between the family members for whom the Times is a career, the family members for whom it is a trust fund, and the public shareholders (who, in keeping with the traditional but still peculiar newspaper ownership structure in America, have non-voting or reduced voting shares compared to the controlling family – the traditional structure at the NYT, the old LAT, the old WSJ, etc., though much altered now). As the article delicately describes the trust-fund family members, most of them “have admirable if low-wage jobs as academics, novelists, musicians, and psychotherapists, but the money [from NYT Co dividends] also funded second homes and hobbies such as underwater exploration.” Which is to say, without the dividends amounting to a trust fund, the extended family looks much like the lower tier of the New Class, which is suffering these days, and not the upper tier, which is doing fine, thanks very much.

Overall, however, the business prospects of the NYT Co. look to rest on whether it can make its digital paywall approach stick or not. I think that’s unclear, but I have divided views. On the one hand, I doubt the quality of reporting and product can be maintained without a digital subscription stream, otherwise it just dissolves into online media outlets cribbing each other for fewer and fewer tidbits of hard information with more and more cheap opinion enveloping it (if one thinks this describes the Times now, imagine a Times reporting the news from Syria as though it were Yahoo’s Your Tango – whatever one’s objections to the Times’ narrations, and I have many, things could be much, much worse). On the other hand, I’m not sure people are willing to pay for it online; I’m not sure there is a mass audience that, if put to the choice, actually cares that much – it would be convenient to say, that’s because they object to the Times’ content, but I doubt it’s that, I think people just don’t care about paying for news, period. The article notes that part of the internal shuffle involved a battle in which the former web development head, Martin Nisenholtz, fought for a free-digital model, and lost out to Robinson. She then lost out to elements of the family and to Sulzberger’s new girlfriend. Against the big picture of newspaper companies, the insider fight looks like this:

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) … Over time, there was less and less for Robinson, and [family insider executive] 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.