NINTH IN A SERIES

Leading in Turbulent Times

Sulzberger Navigates Between Past, Present at the Once Old Gray Lady

By Published on . 1

NEW YORK (AdAge.com) -- How fast, and how treacherous, are the currents sweeping over The New York Times? This September, its home page -- some of the most valuable real estate on the web -- will start automatically displaying links to competitors' takes on big news. That's not your traditional paper of record.
Arthur Sulzberger Jr., publisher and chairman of The New York Times
Arthur Sulzberger Jr., publisher and chairman of The New York Times Credit: Scott Gries

But don't scrap every old way yet. Craigslist's Craig Newmark, of all people, recently subscribed to the print edition for the first time. He wanted to get better informed about the presidential election, he said. "Hence, subscribing to the Times."

The publisher trying to simultaneously navigate the future and the present is Arthur Sulzberger Jr., who nonetheless showed his characteristic bounce when we visited. He smiled when we mentioned Mr. Newmark, who has casually helped destroy newspapers' classified-ad business.

"He's such a mensch, isn't he?" Mr. Sulzberger said. "Did he tell you he was now a subscriber to the Times?"

Mr. Sulzberger, 56, has been publisher since 1992 and chairman of the family business since 1997 but still gets called "Young Arthur" sometimes. It's partly that enthusiasm and tone that strike some people as insufficiently Timesian.

Changed landscape
But something interesting is happening. The light on him started changing after the Chandlers cashed out of Tribune's troubles and the Bancrofts sold Dow Jones to Rupert Murdoch. Mr. Sulzberger, by comparison, blocked a push from Morgan Stanley Investment Management to end his family's control.
What's the future for newspapers?
Ninth in a series
The family yanked major money from Morgan Stanley in apparent retaliation. He doesn't seem different; the environment definitely does.

"The fecklessness of the Bancrofts reflected that Arthur had sharp values," a Times reporter said. "He may not be a business visionary, but he is stalwart in a way that they were not."

You could even argue that visionaries aren't what they once were. Conditions are cloudy in the summer of 2008. The Fed chairman premised his testimony to Congress on July 15 on "considerable uncertainty."

But Mr. Sulzberger remains on the hook for some things you can just feel -- especially if you just survived the newsroom's first-ever layoffs, a response to declining ad revenue, or you own company stock, which hit its lowest price since 1995 last week. The biggest is a brewing battle royal among international news brands. It isn't just Mr. Murdoch's Wall Street Journal, after all, racing to claim turf the Times will want to own. It's Thomson Reuters, CNN, the BBC, the Associated Press, even NBC, the Guardian and others.

"There's a half-dozen to a dozen news entities that are growing into global shoes," said Ken Doctor, the newspaper vet turned media analyst for Outsell, a research and advisory firm. The Times has moved in the right directions in the past several years, he said, but needs to put a brick on the gas pedal. It just moved most of its weekly financial tables out of print July 13, not long after newsprint prices reached a 12-year high. "They came to the right decision, but they came to it slowly," Mr. Doctor said. "That is money that could have saved some of those jobs."

Its dozens of blogs could be hundreds by now, Mr. Doctor added. The Houston Chronicle has 70 staff blogs and about the same number from community members.

More business coverage
As it happens, the Times is about to dramatically expand its business coverage online, gradually introducing a slew of pages on subjects including the economy, energy, small business, personal finance and enterprise technology, according to Vivian Schiller, senior VP-general manager of NYTimes.com. Built on the model of DealBook, Andrew Ross Sorkin's popular blog for the business section, each one will include original reporting and commentary from a dedicated staffer, news aggregated from elsewhere, relevant tools, e-mail newsletters, mobile applications and more.

Despite this expansion into the Journal's core competency, Mr. Sulzberger avoids talk of direct confrontation. As a London correspondent for the AP from 1976 to 1978, when he joined the Times, he saw British papers react when Mr. Murdoch took over the Times of London. "It didn't help them, because they stopped remembering who they were," he said. "We're not going to."

His confidence in the brand can occasionally sound wishful. "The Wall Street Journal, The Washington Post and Newsday or any other competitor can't steal our readers," he said. "We can lose them. And we're not going to lose them."

He doesn't mean this literally. Mr. Sulzberger is as aware as anyone that the Times reported paid weekday circulation of 1.1 million in the six months ending March 31, down 3.85% year on year. Paid Sunday circulation fell 9.26% to 1.5 million.

In his own words:
Arthur Sulzberger Jr.
ON COMPETING WITH MURDOCH'S JOURNAL:
"I saw when the Times of London was taken over by Rupert Murdoch. Those newspapers reacted to it and said, 'We are going to compete against them.' And the result is: It didn't help them, because they stopped remembering who they were. We're not going to."

ON NEWSPAPERS' DECLINE:
"At a time when many of our great competitors are cutting back ... and don't have the fine staffs they used to have and don't have the national staffs that they used to have -- and I could continue on -- the Times becomes more critical."

ON HOW HE WANTS THE TIMES TO CONSIDER HIM:
"As someone who cares desperately about the mission of The New York Times and its core promise to society."
But the number of people who have subscribed at home for two years or more, a group that tends to keep subscribing, has risen to 820,000 from 550,000 three years ago, Mr. Sulzberger said. "Think about that as a solid print base to lever yourself into your digital future."

Brand promise
The Times brand also still towers above most, a point not lost on advertisers, said Denise Warren, senior VP-chief advertising officer at The New York Times Media Group. "That's what sets us apart in this kind of marketplace," she said. "They really get the brand promise of The New York Times and what it delivers."

As a guiding principle, however, "We're not going to lose them" may suffer a little from overconfidence. The company governs from the top down, but the fluidity out there requires a flatter structure, one editor said. "Nobody's on top of the heap right now; everyone's still trying to figure it out," the editor said. "[And] in that process of figuring it out, you have to embrace that entrepreneurial spirit in everybody in the building."

If he hasn't made an entrepreneur of most, Mr. Sulzberger certainly has hired some innovators. The research-and-development group formed in January 2006 under Michael Zimbalist, former head of the Online Publishers Association, has stocked its lab with weird media gizmos to explore. "You need to be adjusting course as you go," Mr. Zimbalist said.

Mr. Sulzberger correctly predicted as much in a 1998 speech arguing that new media would require newspapers to manage severe change, drop their institutional remove and become more accessible to readers.

Now that's becoming a concrete practice at the Times. Marc Frons, chief technology officer for digital operations, described an ethos known internally as Times Open -- which includes the automated links to other sources, called Times Extra, going live in two months. The idea is to weave the Times into the internet by making Times content friendlier to application developers, using distribution tools such as RSS readers and building community tools such as Times People, which lets friends recommend Times articles. "We're competing by collaborating," Mr. Frons said.

Setting the agenda
The trick for the Times will be finding the right mix of competition and collaboration. Whether you love or hate the Times, it plays a big part in setting the national agenda. Its brand depends on maintaining that dynamic. Mr. Sulzberger is right to brag that its site is the most blogged-about news source in the country.

Others, of course, have their own ideas about running the Times -- and its declining ad revenue and paid circulation have given them an unprecedented opening. After the challenge to family control from Morgan Stanley, two hedge funds accumulated a big stake and threatened to run their own candidates for the board. Mr. Sulzberger struck a compromise, giving them two seats. The directors, the first outsiders to reach the board since the company went public in 1967, promptly quieted down. One declined to comment to Ad Age, deferring to Mr. Sulzberger, and the other did not respond to messages.

"I really do believe that our two dissidents, if you will -- although we've now embraced them -- have come to understand that the issues we face are complex," he said. Call that good news about bad news.

New York Times share prices over time
Source: Bloomberg
Those complex issues are the same ones throwing a new light Mr. Sulzberger's way. It's not just that he and his family have held the Times while other owners have quit newspapers, although keeping the next generation of the family together will be no small feat. There are 13 family members in his generation, the fourth, and 27 in the youngest; he convenes semiannual gatherings and other contacts as seems warranted. But the challenges also force him to focus on strategic questions about the paper, its transformation to a digital-information company and the broader media business.

That's preferable to episodes such as the Jayson Blair plagiarism and fabrication scandal. In an infamous incident, Mr. Sulzberger showed up at a company crisis meeting holding a toy stuffed moose. It was a gimmick meant to symbolize things that people were afraid to say, but nobody was in the mood for goofy shtick.

He wouldn't repeat it. "Obviously not," he said. "The anger that came out of that meeting, it was so palpable that the moose wasn't a necessary tool, it became clear," he said. "It just wasn't. Now, it had proven necessary in other situations, but it wasn't in that one, so no.

"But look, if that's the biggest mistake I make as leader of The New York Times Co., this is a good thing."

All the news has print in fits

Times research-and-development chief Michael Zimbalist says the newspaper has to continue changing because the world keeps changing even faster -- and events last week seemed to support his point.

  • Two New York papers, Rupert Murdoch's Post and Mort Zuckerman's Daily News, set aside their vicious duel long enough to consider cooperating.

  • However, newspaper readership in the top 100 markets turned out to have grown for the second big Mediamark Research survey in a row, according to an analysis from the Newspaper National Network.

  • But are people turning to newspaper sites? A Northwestern University Readership Institute study said 62% of respondents had never visited their local daily's site.

  • Tribune Co., meanwhile, fired the publisher of the Los Angeles Times, David Hiller,on the same day his latest round of layoffs started. And The Wall Street Journal, which Mr. Murdoch says is going after The New York Times, raised its newsstand price again -- and cut its edit staff.

    We're all just trying to keep up. For more updates, go to AdAge.com/newspaperfutures.
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