Will a Mexican soon own the New York Times?

[August1991]

Soaring losses amid a devastating media slump have drained much of the corporate cash, pushed the company deeper into debt of $1.3 billion and beckoned a stock vulture to its door -- Mexican billionaire Carlos Slim, who this year bailed out the Times with a high-interest $250 million loan that also threatens family control.

Slim, already the second-largest owner of Times common stock, is poised to become the biggest Times shareholder of common stock because he's allowing his loan to be repaid in six years with stock -- either from the family's main trust or a weakened corporate treasury.

If the first year's payment of $47.5 million, due in nine months, is made in stock in lieu of scarce cash, it would soak up a whopping 7.9 million shares -- based on a current price of around $6. At that depressed stock price, it would take about 48 million shares to repay Slim's IOUs.

However, the family trust holds just 8.9 million common and super-voting shares. At that pace of using stock to eliminate debt, most of the shares of both classes available to the family and the Times could be depleted soon, especially since the Times halted its stock buyback program more than a year ago.

New York Post

This is an interesting story not only because the NYT is left wing and going broke. It's also interesting becasue the Ochs-Sulzerger family members are limousine liberal, trust account kids who may soon find themselves without a trust account.

Finally, I don't what this character Carlos Slim is planning to do - other than get control of the Times.

[bush_cheney2004]

Then what? Probably the same thing that happens when a Canadian tycoon buys something. He/she will make or lose a lot of money (dinero).

[M.Dancer]

Then what? Probably the same thing that happens when a Canadian tycoon buys something. He/she will make or lose a lot of money (dinero).

Yeah...no different than when a foul mouthed Australian buys a paper...or a network...

[bush_cheney2004]

Yeah...no different than when a foul mouthed Australian buys a paper...or a network...

Correct...he has done quite well. There are many bargains out there right now.

[August1991]

Yeah...no different than when a foul mouthed Australian buys a paper...or a network...

The NYT employees can only hope that Carlo Slim has as good an understanding of the media business as Rupert Murdoch does.

[JerrySeinfeld]

The NYT employees can only hope that Carlo Slim has as good an understanding of the media business as Rupert Murdoch does.

With the death spiral that is conventional newspapers, At $0.03 per share, Quebecor world is perhaps overpriced.

This is a "yesterday" business. Long live the right wing online blogger!

[M.Dancer]

With the death spiral that is conventional newspapers, At $0.03 per share, Quebecor world is perhaps overpriced.

Quebecor World is a printer, not a publisher....and they will soon be part of the RR Donnelly empire for 1.3 billion....

Quebecor the publisher (Toronto Sun....) is trading at 18.900

[sharkman]

Most of the big papers in the U.S. are leftwing. Since so many of them are now in trouble, it seems they are prepared to fall on their swords rather than print the news from a balanced, objective view. Just like Chrysler, they stubbornly make a product that isn't wanted, and are surprised when newspapers start folding.

[M.Dancer]

Most of the big papers in the U.S. are leftwing. Since so many of them are now in trouble, it seems they are prepared to fall on their swords rather than print the news from a balanced, objective view. Just like Chrysler, they stubbornly make a product that isn't wanted, and are surprised when newspapers start folding.

It isn't their perspective that is causing hardship for some papers....readership is still strong, it's advertising revenue, particularly classifieds that have seen a huge drop in the last 5 years.

[sharkman]

Hasn't readership been dropping as well?

[M.Dancer]

Hasn't readership been dropping as well?

Yes but not in proportion to advertising revenue. Sites like monsterjobs.com, viewit.ca or craigslists have wiped out the classified pages which for most papers accounted for 30% of their revenue but cost less than half of the other pages (no content cost).

This is why savvy newspapers either quickly set up their own sites or allied themselves with established sites.

Never the less, USA today has a paid circ of 2,113,725 and is up over 3% over the last 10 years

[sharkman]

For every paper you point to with readership up I can point to one that has folded. But perhaps there are more factors in play than I realized.

Edited May 14, 2009 by sharkman

[M.Dancer]

For every paper you point to with readership up I can point to one that has folded. But perhaps there are more factors in play than I realized.

Since I have been in publishing (since 1983) I've seen the death of dozens of papers and magazines....most before the intraweb....the overriding factors have asways been bad management/poor advertising sales/low circulation.

Those 3 areas are linked as they should be.

Funny thing, when I worked for the Finincail Times of Canada, it was profitable. Then management thought, what if we redesigned the puplication, changed the editorial direction and upped the circulation and moved our offices to a location that cost 10 times more....

The "what if" was the old readers didn't like it, the new readers weren't the ones advertisers wanted and our costs went up more than 10 times....

the 80 year old weekly paper went out of business in 4 years and was given the coupe de grace by the Globe and Mail.

[GostHacked]

Then management thought, what if we redesigned the puplication, changed the editorial direction and upped the circulation and moved our offices to a location that cost 10 times more....

The "what if" was the old readers didn't like it, the new readers weren't the ones advertisers wanted and our costs went up more than 10 times....

the 80 year old weekly paper went out of business in 4 years and was given the coupe de grace by the Globe and Mail.

M. Dancer

With the one you are talking about going under. Were you with that company at the time in some way? Did you forsee it folding like that? And have other outfits taken on the same approach and met the same demise?

[sharkman]

I'm sure that there are many examples of organizations that tried to fix something that wasn't broke.

[M.Dancer]

M. Dancer

With the one you are talking about going under. Were you with that company at the time in some way? Did you forsee it folding like that? And have other outfits taken on the same approach and met the same demise?

I was with the company till I saw the writing on the wall and bailed.

I'm sure many companies have hired MBAs with little experiance in the industry they found themselves and applied strategies that worked for packages goods but found they didn't work...

It ws a series of blunders....

The move from a low rent location to our own branded building...

The hiring of The senior editor with no business news experiance...

The redesign by the fellow who redesigned Rolling Stone (our readership was an average of 55 years old)

The TV commercials that had no call to action (no 1-800....)

The building of a TV studio for the launch of Business World (on CBC newsworld)

The circulation drive that cost an arm and a leg but only raised the circ 10%...

And all that just before the 1989 recession which saw financial advertisig collapse and people stop investing in RRSPs Mutual Funds....