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New York Times may find benefactor in Slim
NEW YORK/MEXICO CITY |
NEW YORK/MEXICO CITY (Reuters) - The New York Times Co has heard more than its share of opinions on what it must do to survive. Mexican billionaire Carlos Slim appears ready to let his cash do the talking.
The 68-year-old telecoms tycoon, ranked by Forbes magazine as the world's second-richest man with $60 billion, may pump hundreds of millions of those dollars into the Times Co, with the newspaper company's board expected to meet this week on the matter, a source familiar with the talks said on Saturday.
Slim has fought accusations in Mexico of anti-competitive and monopolistic business practices. More recently, he is known for giving away millions to charity.
His intentions for the Times could be similarly philanthropic.
Some media watchers say Slim is unlikely to try to force the Ochs-Sulzberger family, which has run the New York Times for more than a century, to sell it or make drastic changes. Slim himself said, when he disclosed a 6.4 percent in the Times Co last September, that his interest was purely financial.
"That does make him something of an ideal investor," said Alex Jones, a Harvard University professor and author of "The Trust," which is widely considered the definitive biography of the Sulzbergers and The New York Times.
"This is a man who already has made his fortune and is in his own way an entrepreneur like Adolph Ochs was," Jones said. "That's different from some financiers looking for an opportunity to make a killing."
Slim, currently the fourth-largest shareholder in the Times Co, is near a deal to invest another $250 million via 10-year notes with warrants convertible into common shares, the New York Times reported on Sunday.
While he would not get a board seat or shares with voting rights like the Sulzbergers have, Slim would get a special annual dividend as high as 10 percent or more. He would also become the largest shareholder with about a third of the common shares once he exercises his warrants, the paper reported.
The Sulzbergers would retain control through a special class of shares.
Slim, who has faced accusations of running state-sanctioned monopolies, may seem an odd coupling with The New York Times, seen by many readers as a paper with a strong liberal voice.
In Mexico, Slim is not only the wealthiest man but also the most powerful. His America Movil is the largest cellphone operator in Latin America and provides service to seven out of every 10 mobile users in Mexico.
A probe by Mexico's Federal Competition Commission into monopolistic practices in the mobile industry was launched last April. At the time, it was the eighth such probe. Six other probes are looking into dominance issues involving Slim's Telefonos de Mexico, or Telmex, the country's largest fixed-line phone company.
Despite years of insinuation that he won Telmex because of his friendship with then-President Carlos Salinas in the 1990s, Slim has said he does not have political partners.
He has maintained good relations with Mexico's governments in recent years and even worked to restore old buildings in Mexico City with former mayor Andres Manuel Lopez Obrador, a leftist firebrand who often criticizes big business.
"He has accumulated so much wealth in Mexico that at the end of the day his power could easily translate to that of a political kingmaker, which is why all the aspiring politicians strive to have a certain closeness to him," said Armand Peschard-Sverdrup, a Mexico expert at the Center for Strategic and International Studies in Washington, D.C.
Slim stands to gain from maintaining a close but passive involvement with the Times. The 157-year-old paper is one of the world's hallowed journalistic institutions and is considered a premiere newspaper brand in the United States.
To invest and not seek influence would bolster Slim's reputation outside Mexico, said Todd Gitlin, a journalism and sociology professor at Columbia University.
"I think it would be foolish of him actually to meddle with the paper," he said. "He would benefit from a global reputation of being above mere meddling."
While falling advertising sales threaten all U.S. papers, including many published by the Times Co, the New York Times is considered one that will persevere -- it's just not clear how.
The Times Co's problem is that it has $46 million in cash, $1.1 billion in debt, and a $400 million credit facility that expires in May.
To deal with that, it is holding a $225 million sale-leaseback on its share in its headquarters building in New York and may sell properties like its stake in the Boston Red Sox and papers like The Boston Globe.
On a more fundamental level, the company's 70 percent stock drop from a 12-month high of $21.14 last April is testing the Sulzberger's stomachs and putting pressure on those who live off dividends to cash out before their inheritance dwindles.
Thus, a cash infusion by Slim -- who is known for making heavy bets on hard-hit companies -- should be welcomed by the board. The Times and Slim declined to comment.
"It gives them needed cash, and it may strengthen, not weaken, management's hold by giving them a strong ally," said Tom Rosenstiel, director of the Project for Excellence in Journalism and a former media critic at the Los Angeles Times.
(Editing by Tiffany Wu & Ian Geoghegan)
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