I subscribe to the online edition of the NYT for one reason; so I will know the positions of the enemies of the US. Good riddance, I say. The NYT has had every opportunity to provide accurate news. Instead, they chose to constantly slant every story to the left. The news media is given protection by the US Constitution SO THAT they will provide an unfiltered voice. The NYT provides anything but. Don't get me started about their softball treatment (read: free pass) of The Messiah and their trashing of their previous "poster boy," John McCain. They got BOTH their candidates on the ballot this time around. It's painfully clear which they chose.
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Money Man: Carlos Slim Helú
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Bailing Out the Gray Lady
Can a Mexican billionaire rescue The New York Times?
Jan 21, 2009 | Updated: 12:42 p.m. ET Jan 21, 2009
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A few strong impressions leap out from Monday's announcement that the New York Times Co. will take a $250 million investment from the Mexican company controlled by the world's richest man, Carlos Slim. The first is: The Times really needs the money.
How badly? In December, the Web site 24/7 Wall Street raised a lot of ruckus by including the Times Co. on a list of firms that won't make it through the end of 2009. That always seemed like an exaggeration, mostly because there are a number of steps that the Times could take, short of declaring bankruptcy (including the drastic measure explored in another recent explosive piece, Michael Hirschorn's Atlantic thought experiment about the Times ceasing to publish a print edition).
But even if the Times Co. was not quite on death's door, it is badly wounded. Many have reported that one of the company's two $400 million lines of credit is expiring this May, and given the current credit evaporation, that line is almost certain not to be renewed. Advertising revenue in the month of November dropped by some 20 percent, and the company has been forced into a sale-leaseback arrangement on space in its opulent headquarters in Manhattan. As of Tuesday morning, Times Co. stock was trading at a little more than $6 a share. That means that the stock market believes the entire company is worth about $890 million, an especially painful number since selling the headquarters alone ought to bring in more than that.
And thus, while the Times appears to have had little trouble finding someone to lend it money, it is paying dearly for the privilege. The Times is shelling out an eye-popping 14.053 percent "coupon" on the bond notes (comparable to an interest rate for a loan). That figure alone is probably why traders sent the stock down the morning after the deal was announced. I asked Times Co. spokeswoman Catherine Mathis if the company had ever paid that much to borrow money; her e-mail response was "I honestly don't know the answer. If you recall, in the early '80s, interest rates soared. This is an appropriate rate given the challenging market conditions." Translation: We had no choice.
The second impression is that the company did not go that far afield to find the money. Yes, Carlos Slim and his family and companies are Mexican, but they already have a relationship with the Times Co. Back in September, according to SEC documents, Slim and his family bought 9.1 million shares of Class A common shares of the New York Times Co., meaning that they already own more than 6 percent of that class of Times shares. (It's possible that the Slims held NYT stock before that, just not enough to trigger a reporting threshold.) Depending on how things pan out over the next six years or so, the new deal means that number could climb to about 18 percent.
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