The backstory of board nominees is always fascinating. Faced by activist pressures, the New York Times Co. has assembled a slate of board nominees for the four seats (out of 13) that Class A shareholders -- that is, common shareholders -- get to vote on. One of them is Robert Denham, a partner at Munger Tolles & Olson LLC in Los Angeles and a former chairman and CEO of Salomon Brothers. Why Denham? Well, he's apparently a fine attorney with Wall Street experience, but on the surface he's no media maven, although he did represent the Chandler Trust, the Puliam Trust and the Copley Press in their sale of their various newspaper chains -- an interesting resume for the Sulzberger's Times.
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And Denham brings a shadowy presence in the form of the inimitable Warren Buffett. A co-founder of Munger Tolles, of course, is Charlie Munger, Buffett's longtime sidekick, vice chairman and co-raconteur at Berkshire Hathaway Inc. (Munger traded real estate law years ago for investment management, with Berkshire and at Wesco International Inc., his Pasadena, Calif.-based company). When Buffett swept in to save Salomon in the early '90s, he brought Denham along as general counsel, a pretty important job considering the delicate talks between Solly and the Federal Reserve. When Buffett returned to Omaha, Denham took over. Denham then sold Solly to Sandy Weil's Travelers in 1997 for $9.6 billion in stock.
So while Denham isn't exactly a media guy, Buffett is -- and his reflected glory is powerful. Years ago, Buffett, a big newspaper fan, owned The Buffalo News. The investment was not one of his stellar successes. Much more successful was Buffett's longtime holding in the Washington Post Co., where he first joined the board in 1974. Buffett was a confidante and adviser to Katharine Graham at the Post and to her son, current chairman and CEO Donald Graham. Buffett also over the years forged a special relationship with Fortune Magazine, particularly through the magazine's legendary editor at large Carol Loomis who edited the Sage of Omaha's folksy annual reports for years.
Buffett long extolled the natural monopolies that big city newspapers like the Times and the Post can develop. But those regional monopolies have been severely undercut by the Internet. The question at the Times is whether the Gray Lady can create a national brand that's so powerful that it can resist the competitive inroads that are currently driving its stock into the ground. One thing we do know: While Buffett has never been particularly fixated on the niceties of corporate governance -- in the Times case the dual-class shares controlled by the Sulzberger family -- he is a big fan of superior management. While he continues to hold a large stake in the Washington Post, he seems not to have ever taken a position in the Times. - Robert Teitelman
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