New York Times-Metro Impunity
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This is the fifth story tracking the Metro Racism controversy. To read the previous four, see Metro Racism.
A proposed multi-million dollar deal between two billion dollar firms, The New York Times Company and Metro International, appears to still be on track. This despite earlier MediaChannel revelations tying The Times' proposed partner to a crude corporate culture of racism and sexism – and elsewhere of pornography distribution on the part of the Modern Times Group, one of Metro's largest shareholders (which the Herald now refers to as "the porno-pushing parent of Metro's empire").
Meanwhile reports about the growing corporate scandal continue to appear, with new articles coming from as far afield as Le Monde in Paris and the Financial Times in London. Closer to home, the Herald continues to hammer away at the deal in obvious hopes of killing it entirely, and media writer Dan Kennedy's exegesis of the affair appears in the current edition of the Boston Phoenix .
At the same time, new details – and complaints – about the Metro's practices continue to pour in from former Metro readers and employees – and even executives of the troubled Swedish media empire behind Metro.
One former high-ranking executive who worked closely with the late Jan Stenbeck – the Harvard MBA and onetime Morgan Stanley executive who created the holding company behind Metro and Modern Times – told me he believes that current top executives at both companies are "not the type of people who should be in those positions in a publicly traded company." He added that "investors should know these people are lining each others' pockets and creating enormous wealth for themselves" through back-door deals, favorable sales of stock options and the like.
"It's indicative of their arrogance that they feel they can act with such impunity," the insider explained. "They have contempt for both the public and their investors."
The ex-exec also denounced Metro's "attempt to paper over the problem" when it announced various half-hearted corrective measures in response to last week's revelations. "From a business standpoint, investors must realize something more profound is going [on] at Metro," the executive concluded, referring to the non-resignation resignation of Metro USA head Steve Nylund, who remains with Metro in a "non-operational role" – whatever that means.
"Since Jan died in August of 2002, the group of companies have been run by individuals who were originally put in the position because of their total acquiescence to Jan – not for their talent, as this latest episode shows," he continued. "I resent seeing Jan's empire stolen by these types of individuals, And if I were an investor in or customer of The Times, or Metro, I'd want to know how seriously the current management really intends to take this issue."
The executive also denounced "the act of appointing an 'American' to the position of 'Global Human Resource Director,'" saying it is "as cynical and disingenuous as the 'firing' and resignation of Nylund and Albrecht."
And he explained that the newly appointed Metro executive Bob Powers "is not an outsider in the slightest. He has been with the group since at least August of 2000. Powers already runs several entities that belong to the Stenbecks, including "Applied Value" and "Audit Value International".
"Given the total in-breeding of the board of directors of all the Stenbeck companies, you can imagine how much power this man has to effect any change at Metro, or indeed the real desire of the directors to effect any change," the source continued. "The more I read about this story, the more disgusted I become. I realize that many companies have their dirty little secrets, but it's when the people who run those companies begin thinking that they can act with impunity that you have to worry about another Enron or Tyco type disaster. It's my opinion that the episode that you have been reporting is merely the most public manifestation of senior managements' utter contempt for their employees and customers. Since Stenbeck's death, it is easy to imagine that the wealth that has been amassed by the CEOs (which Stenbeck never would have permitted) has given them a feeling of invincibility."
Finally, the Stenbeck insider said he "can confirm that the almost total lack of women or minorities in senior level positions was certainly remarkable, even here in Europe. I believe that Jan was attempting to change that in the years before his death. He instituted the hiring of MBAs from top U.S. universities, in an attempt to diversify away from the total control by Swedes. The program was extremely unpopular with the CEOs (none of whom, I believe, have MBAs), and one of the first moves they made on Stenbeck's death was to get rid of the MBAs who were not Swedish."
Despite the continuing allegations and revelations, Times spokeswoman Catherine Mathis says The Times does not "have responsibility for the other business activities of Metro International, its investors or other business partners."
And Metro head Pelle Törnberg, who was in crisis meetings in Manhattan all last week reassuring Times executives that Metro was a legitimate company to do business with, is also untroubled.
"Our competitors like to continue to talk about Metro being a racist company, but that's not true," the 48-year-old Swede told the Financial Times .
Törnberg called the Metro-racism story "reheated" by competitors such as the Herald, and averred that Metro had "reacted pretty quickly and took action over the things we've been accused of. We have no reason – after our contacts with The New York Times – to believe that the deal will not go ahead."
But investors and financial analysts may soon have a different take. One Wall Street analyst told the Boston Herald the affair has already turned into "another embarrassment" for the media giant. "It's getting a little messy," said Edward Atorino, a Wall Street analyst with Fulcrum Global Partners. "I've got to believe that somebody in that New York Times Company is saying, 'What do we do now?'"
New Times Company president and CEO Janet Robinson may yet have to scotch the deal to avoid further damage to the vaunted Times "brand." Is the relatively small $16.5 million dollar purchase of 49 percent of Boston Metro really worth the risk to the $3.2 billion annual revenue of The Times ?
"This thing was supposed to be a no-brainer, and it's become a pain in the ass," Atorino concluded.
Alex Jones, director of Harvard's Shorenstein media center and a former Times man, had another take. Although The Times would absolutely balk at affiliation with an organization that was credibly considered racist, Jones told the Herald: "I'm not sure telling two jokes puts (Metro) in the camp of confirmed racist."
Two jokes? Did Jones even bother to read my original story?