The New York Times and Fivespan Partners: A Case Study in Media Sector Resilience and Institutional Confidence

Institutional investors have long viewed the media sector as a paradox: a declining print industry coexisting with explosive digital growth, and a landscape fragmented by algorithmic platforms yet anchored by legacy brands with enduring cultural capital. Fivespan Partners' strategic stake in The New York Times (NYSE: NYT) offers a compelling lens to analyze this duality. As a newly launched activist firm led by Dylan Haggart—a former ValueAct Capital partner with a history of steering media transformations—Fivespan's involvement signals both caution and optimism. The firm's focus on mid-sized companies with “idiosyncratic” value aligns with The Times' unique position as a digital pioneer grappling with structural inertia.

Digital Growth vs. Structural Challenges

The New York Times' financials paint a mixed picture. In Q4 2024, digital subscriptions hit 11.3 million, contributing 70% of its subscriber base and driving 16% year-over-year revenue growth. Total 2024 revenue reached $2.6 billion, with a 19.5% operating margin, underscoring short-term resilience. However, print revenue continues to erode, with subscribers declining from 730,000 in 2022 to 610,000 in 2024. This raises a critical question: Can a digital-first model sustain profitability when legacy costs remain embedded in the business?

Fivespan's stake in The Times suggests confidence in its ability to navigate this transition. Yet the firm's activist playbook—rooted in operational efficiency and capital structure optimization—will likely target two areas: AI adoption and governance reform. The 2024–2025 tech strike by the Times Tech Guild, which delayed AI tools for content personalization, highlights internal resistance to innovation. Competitors like The Washington Post have already leveraged AI to refine audience targeting, while platforms like TikTok and Substack dominate younger demographics with algorithmic content.

Governance and Cultural Barriers

The Ochs-Sulzberger family's 88% voting control via a dual-class share structure has historically prioritized cultural preservation over agility. This governance model, while stabilizing, limits The Times' ability to pivot quickly. For instance, unionization of digital tech staff has slowed AI integration, contrasting with the rapid experimentation seen in the creator economy. Meanwhile, only 12% of CEO pay in the S&P 1500 is tied to innovation metrics—a statistic that mirrors The Times' own executive compensation structure, further misaligning incentives for digital transformation.

Fivespan's collaborative activism could address these misalignments. By engaging with management, the firm may push for:
1. Executive compensation reforms to tie bonuses to AI-driven metrics (e.g., user engagement, content virality).
2. Strategic divestitures of underperforming print assets to fund digital initiatives.
3. Partnerships with AI-first platforms to co-develop tools for content curation and monetization.

Sector-Wide Trends and Institutional Sentiment

The media sector in 2025 is defined by fragmentation and the rise of the creator economy. Consumers now spend six hours daily across streaming, social media, and gaming, with traditional pay TV's share collapsing. Ad spending is shifting toward platforms that offer algorithmic personalization, a space The Times has yet to fully exploit.

Institutional investors are also recalibrating their strategies. Q1 2025 saw a 26% year-over-year increase in MarTech and Ad Tech deals, reflecting a preference for scalable, data-driven models. Fivespan's focus on capital-efficient growth aligns with this trend, as does its emphasis on mid-sized companies with durable assets. The New York Times' portfolio—spanning The Athletic, NYT Cooking, and The Daily podcast—offers a foundation for diversification, but scaling these requires a cultural shift toward agility.

Investment Implications

For long-term investors, The New York Times represents both risk and reward. The stock's 12-month performance (see