carlos slim new york times, carlos slim, struggling new york times
Marcelo Salinas/AP
Mexican billionaire Carlos Slim Helu

New York Times’ New Billionaire Backer Is Fresh Sign of National Newspaper Crisis

January 21, 2009 01:29 PM
by Isabel Cowles
The New York Times Company has recently sold $250 million worth of shares to Mexican billionaire Carlos Slim, illustrating that even major national newspapers are flagging under rough economic conditions.

Is Carlos Slim Saving The Times?

The New York Times Company, which owns and controls The New York Times, accepted $250 million from Mexican billionaire Carlos Slim Helú to bolster its struggling finances; advertising sales have declined and the newspaper is carrying $1.1 billion in debt.

Slim, who is reported to be the world’s second-richest man, is the owner of Banco Inbursa and Telmex, a communications company. He already owns 6.9 percent of the Times Company; the deal would increase his ownership to 17 percent.

“By having a stake in the New York Times, he’s basically projecting himself as a powerbroker in this country, regardless of how his investment does,” Armand Peschard-Sverdrup, senior associate at a Washington think tank told the Associated Press.

Despite becoming one of the largest single shareholders in the company, Slim will not get representation on the Times’ board and would have no special voting rights. The Ochs-Sulzberger family, which owns about 19 percent of the company, maintains control through a “special class of voting shares.”

Background: Publications Struggling Nationwide

Publications across the United States were facing tough times even before the economic crisis; plummeting advertising sales and the abundance of free online news content have put several metropolitan newspapers in jeopardy. For example, the Seattle Post-Intelligencer went up for sale recently. The only other paper in the city, the Seattle Times, may also shut down; if both publications were to close, Seattle would be the only major U.S. city without its own newspaper.

In December, Tribune Co., one of the nation’s largest newspaper publishers (controlling the Los Angeles Times, Chicago Tribune, Baltimore Sun, Orlando Sentinel, Hartford Courant, Morning Call and Daily Press) sought bankruptcy protection, due to a $13 billion debt and a loss of advertisers. In the meantime, the group that owns Philadelphia Inquirer and the Philadelphia Daily News missed an interest payment in an attempt to get their loan renegotiated.

Last week the Minneapolis-St. Paul Star Tribune officially filed for bankruptcy protection after talks with major unions did not yield a series of labor concessions the paper said would be necessary to sustain it economically. The Star Tribune plans to continue publishing news as it restructures its finances, however.

Opinion & Analysis: What Would the United States Be Without Print?

Many print reporters and publishers are concerned about the ramifications of newspaper closings. Ken Robertson, executive editor at the Tri-City Herald in Washington, told a reporter at Oregon Public Broadcasting that many online news sources do not have the same rigorous reporting standards as newspapers.

Robertson asked, “Do you want Bob down at the corner store making all the decisions about information?” or someone who has spent decades making “intelligent decisions about the information you need and what’s important.”

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