Are The Sulzbergers Broke?

Have the Sulzbergers, the family who has owned and controlled the New York Times for more than 100 years, been cleaned out by the stock's collapse?  No.  At least not yet. 

But unless they've stashed heaps of money in assets other than the New York Times Company (NYT), they're a lot less wealthly than they used to be.

The Sulzbergers--a group that, for the purposes of this post, we'll define as the four children of Iphigene Ochs Sulzberger, the daughter of Adolph Ochs, who bought the paper in 1896--together control approximately 19% of the New York Times Company's stock.

Five years ago, when the New York Times Company's stock was trading at $45 and the equity was worth about $6.5 billion, the Sulzbergers' stake was worth about $1.2 billion, or $300 million each.  In addition, the company was paying about $120 million a year in dividends, approximately $23 million of which accrued to the Sulzbergers--or $6 million each. (Nice!)

Alas, times have changed.

Now, with the New York Times Company's stock trading at $3.50, the company's equity is worth $500 million, which leaves the Sulzbergers with about $95 million, or about $25 million apiece.  In addition, the company has just eliminated its dividend.

So the Sulzbergers do not appear to be broke--although is always possible that, like Sumner Redstone and millions of others, they levered up. (This would actually make sense, given that most of the family stock is held in trust. And when your stock holdings are worth $300 million, it would seem reasonable to borrow, say, $25 million).

We do imagine, however, that, late in the evenings, perhaps after a drink or two, the Sulzbergers occasionally think about what might have been.  Specifically, we imagine they think with envy of three of the country's other great newspaper families, the Chandlers, the Bancrofts, and the Grahams, who find themselves in a distinctly different situation.

The Grahams (WaPo) turned their newspaper company into an education company...and must be thanking heaven they did.  The Chandlers (Times Mirror / Tribune) and Bancrofts (Dow Jones), meanwhile, had their papers pried from their hands by huge bids from acquisitive moguls at the peak of the stock-market boom.  At the time, many people felt sorry for them, as though they had somehow fought a good fight...and lost.

But the Chanders and Bancrofts do not seem like losers anymore.  On the contrary: They seem brilliant.  They seem as though they got out of a once-fantastically profitable 200-year old industry just in the nick of time, sticking Messrs. Murdoch and Zell with the wreckage. 

The Sulzbergers are distinctly not broke, at least not yet.  But barring a miraculous industry recovery, it does not appear that they will follow the Chandlers, Bancrofts, and Grahams into the golden post-newspaper-owning sunset.

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