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July 30, 2007

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With Great Power Comes...

James Fallows on two-tiered stock structure in media ownership:

The only justification for “Class B” shares giving special voting power to the Sulzberger family at the Times, the Graham family at the Post, and the Bancroft family at the Journal is the assumption that the families will weigh other factors in deciding how the news operation should be run.

That is: other potentially non-economic factors.

Of course, Class B shares aren’t just an old-school thing. Guess which other company uses them to give super-votes — and, potentially, the power to defy the market — to founders and top executives?

Google.

Update: James Fallows notes the Google gambit too.

Robin-sig.gif
Posted July 30, 2007 at 12:37 | Comments (2) | Permasnark
File under: Briefly Noted, Journalism, Media Galaxy

Comments

Hotly smart observation, Mr. Sloan. What an interesting connection. But I wonder whose market-defying, super-votes are doing the best job of driving their companies toward long-term financial prosperity?

Well, as Fallows points out, Class B shares really only matter in the clinch. When your company is piping along making a billion dollars in pure profit every quarter, Wall Street and the executive suite tend to agree on things, more or less.

It's when things slow down and business is bad that opinions diverge.

And honestly I don't know much about the WaPo's record on this, but it seems to me that the NYT at least has done a good job keeping it eye on the ball in the face of declining margins. I think they are thinking long-term, and I think they'll be successful long-term -- as a news organization AND as a business.

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