A co-signer of The Times

Thomas Edsall of The Huffington Post today canvassed several “well-informed observers” of The New York Times (specialists in bankruptcy law).

Their prognosis was not good. Their jointly downbeat assessment flies in the face of some new proposals by The Times to thrive in a battered economy populated by risk-averse advertisers and wary consumers content to graze at several stops along the information highway.

Hope still springs eternal from the Times 52-story, $400 million headquarters in midtown Manhattan, even as a river of money seeps from the company inside.

Distilling the view of the observers, Edsall writes that, in their view,

[I]nsolvency may be roughly a year or two away.

If officials of the paper are forced to declare bankruptcy, it will be difficult — perhaps impossible — for the Sulzberger-Ochs family, which has been at the helm since 1896, to prevent the paper from falling into the hands of an individual or a corporation (for example, Rupert Murdoch and the News Corporation) whose journalistic principles are markedly different from, if not antithetical to, those that have guided the United States' dominant newspaper.

The family’s one out may be not in whether it sells but in who it sells to. With ownership of a majority of a special class of stock (without which no purchase of The Times is possible), the Sulzberger family can head off the ignominy of bankruptcy by selling those shares to whoever they choose. For this reason, and because of the economic headwinds the company faces, the enduring journalistic legacy of the Sulzbergers may well depend on the vision of the prospective buyer, and the family’s ability to get that vision.

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Of all the names floated as a possible new owner of The Times might be, the name of David Geffen — the billionaire investor whose early bets on Joni Mitchell, Jackson Browne, the Eagles and DreamWorks cemented his status as a media visionary — is for now easily the most intriguing.

Businessweek reported earlier this month that Geffen intended to invest $200 million for a stake in the Times Company of just under 20 percent, buying out the stake owned by the hedge fund Harbinger Capital Partners.

It may be more than just a savvy piecemeal investment. According to Newsweek’s Johnnie L. Roberts, “two people familiar with Geffen’s thinking” said the mogul “would regard the newspaper … as a national treasure meriting preservation into perpetuity.”

As Newsweek lays it out, the Geffen plan, if one truly emerged, would entail running The Times as a nonprofit organization, something roughly analogous to the St. Petersburg Times, controlled by the independent Poynter Institute for Media Studies, a nonprofit educational institution — a relationship singular among American newsgathering organizations.

There’s another way. The Times could also explore the benefits of reforming as an L3C, a lower-profit variation on the limited liability company (LLC) that would combine the pursuit of work of a proven social benefit with a secondary profit motive, attracting both private investment and philanthropic capital.

Either way, it would be a shift not so much cataclysmic as epochal: the nation’s consistently pre-eminent newsgathering entity free to subordinate (if only slightly) pursuit of the relentless profit motive and to further its journalistic role as the template of a free press, an entity more fully in the public interest: “nytimes.org.”

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But something’s got to be done, and quickly, and smartly. This is a company bleeding cash, at the mother of all burn rates. Edsall reported that the New York Times Company lost a breathtaking $74.5 million in the first quarter of this year — compared to a loss of $335,000 the same time last year.

The reliable New York Observer reported Friday that Times executive editor Bill Keller met with staff on Wednesday to discuss not one but two! paid-content models apparently being considered by the Times:

”One includes a ‘meter system,’ in which the reader can roam freely on the Web site until hitting a predetermined limit of word-count or pageviews, after which a meter will start running and the reader is charged for movement on the site thereafter. He warned staff at the meeting that this pay model would be ‘tricky.’ If the word-count limit or page-view limit is set too low, it could chase readers off, compromising traffic and advertising revenue.”

We can credit (or blame) much of this idea on the fact that people who work at The Times take taxicabs all over New York City. Because that’s what this is: a use-weighted (as opposed to distance-weighted) approach to charging for content.

As such, it’s more than “tricky”; it’s truly problematic, on several levels. The New York Times has never been a snapshot of a newspaper; the very level of detail and complexity The Times can bring to bear on any topic under the sun has been its historical hallmark, and the very best asset it has to trade on in the future.

If the “meter system” hinges on word count, then, it’s highly subjective when the meter should kick in. What’s the criteria? How much of a Frank Rich piece do I get before the meter starts running? Is it the same word count I get for a David Brooks op-ed before the word-count flag drops? When will the meter kick in for breaking news stories?

A page-view threshold has its problems too; the vast numbers of computer screens in the world, Kindle and laptop, iPhone and desktop alike, are of different sizes and operate at different levels of resolution. It’s hard to enforce a page-view standard when there’s really no such thing as a standard page view.

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But frankly, all of these seemingly fresh ideas point to a problem as fundamental to the Times as its identity as a news operation: the people directing the Times as a news operation. For any of these ideas to see the light of day would mean that, in less than 10 years, the New York Times will have gone from supporting a free-content online business model to endorsing a paid-content model to renouncing that paid-content model to championing the free-content model to backing another paid-content model likely to be one of the most intrusive and complicated of anything online.

This after having announced a raising of the price of the Times newspaper for the third time in 23 months.

Who’s in charge? How did the most respected single voice in American journalism come to lurch from one strategy to another, frantically tacking left and right in search of some faint breeze? How’d they lose sight of the overall? Who's got the throughline?

Given the challenges facing them, you have to wonder what pact with the devil may be necessary to keep The Times viable and independent. Who’ll co-sign to let the Sulzbergers stay in charge? And if the center can’t hold, can the Times brain trust make a next move that upholds the journalistic principles of the institution as well as the fiduciary principles of a business?

Last month, Arthur Sulzberger Jr., said this at the Times annual meeting:

“We know that there are considerable challenges before us, but past experience teaches us that the outcome will be determined by our ability to adhere to the formula that has successfully driven this Company for so long.”

And there lies the ominous problem: The formula that has successfully driven the New York Times for so long may be close to driving it into the ground.
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Image credits: New York Times front page: ©2009 The New York Times Company. Geffen: Paul Hawthorne/Associated Press. New York taxi: Nrbelex, republished under GNU Free Documentation License v1.2. Sulzberger: jdlasica at flicker.com