Sunday, January 18, 2009

NYT called potential savior a ‘thief’

The Mexican billionaire who may provide hundreds of millions of dollars to save the New York Times from potential default was characterized as a thief in the newspaper less than 18 months ago.

Carlos Slim Helú, whose fortune of approximately $60 billion makes him the second-wealthiest man in the world, was reported by the Wall Street Journal over the weekend to be negotiating a financing that would prevent the New York Times Co. from possibly defaulting on $400 million in debt due in May.

“The talks are ongoing and may yet fall apart but one of the options being discussed is a preferred-stock issue” that would be structured somewhat like a loan and carry no voting rights, according to the Journal. “It’s not clear how much Mr. Slim would be willing to invest but the people familiar with the matter said it would likely be several hundred million dollars.”

(UPDATE 1/19/09: The Times reports the financing will be a $250 million, six-year, senior, unsecured note bearing 14% interest with warrants that, if fully exercised, could give Slim control of up to 18% of the company. The notes do not include voting rights but the common shares acquired through the warrants would have voting rights.)

Slim bought a 6.4% stake of NYT in September but the value of his shares since then has dropped by more than half to about $60 million. Inasmuch as a default by NYT would further erode the value of his holdings, it is fair to assume Slim would be motivated to come to the aid of the company.

Slim finds himself in a position to do so as the result of the wealth he amassed by owning a near-monopoly over both wired and mobile telephone services throughout Mexico.

Slim’s success as a businessman was the topic of a bluntly worded column by Times editorial writer Eduardo Porter in August, 2007. Here’s some of what he had to say:
Mr. Slim is richer even than the robber barons of the gilded age…. It takes about nine of the captains of industry and finance of the 19th and early 20th Centuries — [John D.] Rockefeller, Cornelius Vanderbilt, John J. Astor, Andrew Carnegie, Alexander Stewart, Frederick Weyerhaeuser, Jay Gould and Marshall Field — to replicate the footprint that Mr. Slim has left on Mexico.

But the momentous scale is not the most galling aspect of Mr. Slim’s riches. There’s the issue of theft.

Like many a robber baron — or Russian oligarch, or Enron executive — Mr. Slim calls to mind the words of Honoré de Balzac: “Behind every great fortune there is a crime.” Mr. Slim’s sin, if not technically criminal, is like that of Rockefeller, the sin of the monopolist.

In 1990, the government of President Carlos Salinas de Gortari sold his friend Mr. Slim the Mexican national phone company, Telmex, along with a de facto commitment to maintain its monopoly for years. Then it awarded Telmex the only nationwide cellphone license.

When competitors were eventually allowed in, Telmex kept them at bay with some rather creative gambits, like getting a judge to issue an arrest warrant for the top lawyer of a competitor. Today, it still has a 90% share of Mexico’s landline phone service and controls almost three-quarters of the cellphone market....

But Mexico has paid, dearly. In 2005, there were fewer than 20 fixed telephone lines for every 100 Mexicans, and less than half had cellphones. Just 9% of households had Internet access. Mexicans pay way above average for all these services....
Now, Slim appears poised to be the man who may come to the rescue of America’s newspaper of record.

13 Comments:

Blogger SactoMan01 said...

I think you're forgetting that one way the New York Times has lost a lot of readers is the fact they've "in the tank" for the Democratic National Committee at times, which has turned off a LOT of readers. If they had not be like this (the Times conveniently forgot former Editor-in-Chief Abe Rosenthal's dictum about keeping the editorializing out of the news stories) they would have kept their readership and probably have even survived in today's poor economy.

3:50 AM  
Anonymous Solitude said...

Slim will save the NYT... the way he saved Comp USA.

6:03 AM  
Anonymous Anonymous said...

This would not be the first time the Times has sought help south of the border from the disreputable. President Salinas was on the board of The Times when it was discovered that he and his brother had siphoned millions of government money into secret Swiss bank accounts. Perhaps Sr. Salinas once again helped his old amigo Sr. Slim in this transaction.

6:57 AM  
Anonymous Anonymous said...

The NYT never had a problem when it was a true, honest, liberal voice. But when it abandoned its identity to corporate conservatism, that's when things went downhill. The unfortunate pandering of many papers to dishonest corporate conservatism has come at the exact same time as the collapse of the industry.

8:55 AM  
Anonymous Anonymous said...

Yes, when I think of the NYT, I so often think: "Hey, this is true corporate conservatism, at its finest, no less".

Uhm, just how far left does one have to be to look at the Times as a standard bearer for today's conservative movement?

9:39 AM  
Anonymous Anonymous said...

What is with these tiresome cranks who turn every media thread into a sermon about media's failure to abide by the cranks' political agenda? Don't flatter yourselves. Media companies are facing the same tough business world as everyone else, coupled with technologies that have upset their apple carts. Your beliefs -- let's call them biases -- play no role in what's going on.

10:04 AM  
Anonymous Anonymous said...

Forget newspapering -- you can read a blog post about a stuffed-turkey recipe and the chances are at least fair that the inarticulate blog-commentariat will find some excuse to turn it into a half-assed political screed about "the libs" or the "rethugs" or whatever, usually using tired phrases like "in the tank." It's their hobby, and sadly, it seems to be their life.

Note: "the NYT" didn't say anything about Slim, a single columnist did. And he didn't use the word "thief," so that probably should have quotes wrapped around it in the headline here. Not that I expect thoughtfulness or carefulness from this particular blogger.

1:51 PM  
Anonymous Dave D. said...

...Which is why Newscorp is on the ropes, just like the NY Times is...Uh...er...

1:54 PM  
Anonymous Anonymous said...

The next person who says something is "in the tank" is going to get his head submerged in the bowl.

5:14 PM  
Anonymous Anonymous said...

It's fun to watch the old gray lady decompose in real time. Maybe castro, chavez, ahmadinejad and the saudi's can buy part of the Times too!

Soon the Times will be sold and Pinch will complete his mission of destroying the family business.

8:12 PM  
Anonymous Anonymous said...

Yes, indeed, the NY Times sucks up to and almost fetishizes corporate conservatism.

Anyone who thinks otherwise must also have been surprised by the housing bubble and stock market collapses.

5:51 PM  
Anonymous Anonymous said...

The point everyone seems to be missing is the clear hypocrisy of the Times. If Carlos Slim was, in 2007, worse than the Robber Barons of old, and the antithesis of what the Times claims to stand for, then getting into bed with him in 2009 can mean only one of two things (a) Mr. Slim has radically changed his behavior - less probable than my winning the next three consecutive powerball lotteries, or (b) the Times doesn't really believe it what it claims to stand for - almost a virtual certainty.

The silver lining, of course, is that, given Mr. Slim's penchant for investing in failing companies (see CompUSA), we may yet see the death of the Left's primary propaganda mouthpiece sooner than we had expected; all the more so as Mr. Murdoch has already acquired too many NYC-based newspapers and thus would not be permitted to acquire the Times, thus ensuring its ultimate demise.

In these sad days, it is the small pleasures that console the best.

5:53 AM  
Anonymous worker said...

Anon @ 5:53: First, read anon @ 1:51. A columnist printed in the Times does not mean the paper as an entity "believes" what he does.

Second, how does a good conservative like you take pleasure in the thought of hundreds of people losing their jobs? Not all are reporters or editors, mind you, but designers and receptionists and HR folks and press operators... folks who quite possible share your political or religious view. At the very least, they are Americans who are currently employed, and you should think hard about how much pleasure you take in the idea of them becoming unemployed Americans.

3:29 PM  

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