Given some of the recent history between Morgan Stanley and The Times’ board, the news comes as little surprise.  In April a Morgan Stanley managing director, Hassan Elmasry, unsuccessfully challenged the Sulzberger family’s controlling position of the company, which gives them super-voting stock and a board majority.  According to Bloomberg, “Shareholders owning 42 percent of the company, parent of the namesake newspaper and Boston Globe, withheld support for directors at the publisher's April annual meeting.”

Porter Bibb, a managing partner with Mediatech Capital Partners LLC and a former NY Times executive, said, “This guy (Elmasry) has been speaking for a lot of people who are too discreet to speak up and challenge management.  (If Elmasry did indeed sell Morgan Stanley’s position) it's almost a dead certainty there would be a bailout of other institutional holders.  If that happens and there is a sharp drop in the share price, the Sulzbergers have to sit down and decide whether now is not a good time to take the company private.”

Shares of the Times fell $0.43 (2.3%) at 4:04pm in New York Stock Exchange composite trading, the lowest level since 1997.  Overall this year shares of the company are down 24%. 

It has been a bad period for newspaper companies in general as they grapple with a shifting reader base that relies more on the internet for information than traditional dailies.  Gannett Co., owner of USA Today, and McClatchy Co., which publishes the Miami Herald, are also trading at 10-year lows.  Analysts cite advertising and classifieds losses as the central reason for the declines.

Gannett reported today that third-quarter profit dropped 10% due to classifieds losses and reductions in TV revenue.

The New York Times reports its third-quarter results on October 23rd.