Fortune and BusinessWeek are piling on the story of Harbinger Capital Partners, a $19 billion hedge fund, seeking to take over the New York Times (NYSE: NYT). Harbinger now owns 19% of its Class A shares. Of course, Harbinger is not the only threat to management of the Times -- News Corp.'s (NYSE: NWS) Rupert Murdoch is doing his part as well. Will Steve Rattner, a long-time friend of Times publisher Arthur Sulzberger and Managing Principal of Quadrangle Group, come to the rescue and take the Times private?

In play here are Phillip Falcone, a Harbinger partner who made $1.7 billion last year, and the quaint idea of protecting a media company's founding family by maintaining two classes of stock: Class A for the public to make insiders liquid and Class B for the insiders. Murdoch and Sulzberger enjoy protection for their family dynasties thanks to that two-tiered structure.

Falcone thinks that the Times is leaving huge amounts of money on the table by not "monetizing" all the comments on its stories. What sparked this idea was a January opinion piece by Caroline Kennedy comparing Barack Obama with her father, President John F. Kennedy. There were only a few comments about the article on the newspaper's Web site, nytimes.com, but there were hundreds on Huffington Post and Digg.com. BusinessWeek quotes Scott Galloway, founder of hedge fund Firebrand Partners and Falcone friend who said: "We came to the collective conclusion that there was so much upside in terms of billions of pages the paper wasn't monetizing. He [Falcone] never looked back."

Continue reading Will Steve Rattner save The New York Times?

Will Steve Rattner save The New York Times? originally appeared on BloggingStocks on Fri, 25 Apr 2008 10:10:00 EST. Please see our terms for use of feeds.