Goldman Sachs Remains Skeptical of Hedge Fund 'Strategy' for NYT Co

Article excerpt

Goldman Sachs analyst Peter Appert puts a pencil to paper and figures out the financial payback of Harbinger Capital/Firebrand Partner's strategy for The New York Times Co. and basically concludes the company is better off with its current management and board.

Harbinger and Firebrand suggest -- though a real plan has yet to be revealed other than a proposed slate of Class A nominees -- that the New York Times should sell its non-core assets and reinvest the proceeds in high-growth Internet-related companies.

Appert strikes down that notion: "We believe investors may be miscalculating the financial implications of a massive asset swap at the New York Times," he wrote in a research note released this morning.

By his calculations, if the company sells its New England Media and Regional Groups, its stake in New England Sports Ventures, and its headquarters building, and keeps the flagship and the International Tribune, the company could fetch an estimated $1.8 billion after taxes. That comes to a multiple of about 7 times EBITDA.

However, by plugging that money into high growth Internet investments with average multiples of about 19 times EBITDA, the company's 2008 EBITDA would drop by roughly $100 million. …