Activist urges New York Times to further embrace AI
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Fivespan Partners has built a stake in the New York Times, pitching that artificial intelligence could further build its subscription base.
Why it matters: The Times is no stranger to activist investors, but it's typically succeeded in warding off threats.
- ValueAct built a 6.7% stake in the Times in 2022 in an attempt to pressure the company on its subscription strategy. But the firm subsequently sold much of its stake following a strong rally in NYT shares in 2023.
- Fivespan was launched by Dylan Haggart and Sarah Coyne, two people who led ValueAct's investment at the Times.
Zoom in: Fivespan argues that AI could more than double the Times' long-term revenue and profit, according to Bloomberg citing a letter to Fivespan investors.
- The firm's suggestions include creating text and audio translations, deploying more dynamic paywalls, and creating low-cost videos.
- The Times declined to comment. Fivespan did not immediately respond to requests for comment.
By the numbers: The Times' stock price, which is up 15% year to date, did not meaningfully move on the news.
The big picture: The Times and Wall Street Journal parent News Corp. have both taken a more cautious approach to striking AI deals than some of their publishing peers, but both firms continue to invest heavily in AI.
- The Gray Lady recently struck a multiyear deal AI licensing deal with Amazon to bring its journalism to a number of Amazon-owned products and experiences.
- It was early to hire AI experts for its newsroom, posting a job for a "newsroom generative AI lead" in September 2023 and hiring Quartz co-founder Zach Seward later that year.
Yes, but: The Times was one of the first news organizations to sue a major AI company when it sued OpenAI and Microsoft in 2023. News Corp. has sued Perplexity.
What to watch: The Times is still actively engaged in its lawsuit against OpenAI and Microsoft. The outcome of that case is expected to set a historic precedent around copyright for news publishers in the AI era.
