The New York Times-20080128-Hedge Fund-s Letter Explains Intentions Regarding The Times

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Hedge Fund's Letter Explains Intentions Regarding The Times

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One of two hedge funds seeking to name directors at The New York Times Company sought on Sunday to clarify its intentions for the newspaper publisher, saying it wanted the company to sell some assets and focus on digital publishing.

The head of the fund, Firebrand Partners, whose role in the nomination of new directors had not been disclosed previously, wrote in a letter to the Times Company's chairman, Arthur Sulzberger Jr., and its chief executive, Janet L. Robinson, that it also would not seek to change the company's ownership structure.

The New York Times is a great institution controlled by the Sulzberger family, and we have no illusion about, or desire to change, that fact, Scott Galloway, Firebrand's chief executive, wrote in the letter.

The letter is expected to be made public in a regulatory filing on Monday. A Firebrand spokesman declined to comment.

A Times Company spokeswoman, Catherine J. Mathis, said in a statement on Sunday night: We regularly have detailed discussions on these kinds of strategic issues with our investors. She added, As always, we remain open to ideas from and dialogue with our investors.

Firebrand is working with Harbinger Capital Partners, an Alabama hedge fund that on Friday declared its intent to name four new directors to the Times Company. Together, the two funds own a 4.9 percent stake, Mr. Galloway wrote in his letter.

Firebrand and Harbinger have teamed up before, having installed Mr. Galloway on the board of Gateway, the computer maker, in 2006.

In his letter, Mr. Galloway wrote that the Times Company should focus on its core publishing business. That should include selling assets to finance deals for digital media, he wrote.

By declaring that they seek no change to the Times Company's stock structure, the funds are hoping to avoid the hostile reaction a senior Morgan Stanley portfolio manager received last year when he asked the publisher to merge its two stock classes.

Members of the Ochs-Sulzberger family, who own the majority of the company's Class B shares, control nine of 13 board seats. The family has rebuffed calls to change that system.