Carlos Slim, one of the richest men in the world, will be investing $250 million dollars in the New York Times.
The Mexican billionaire is reportedly in discussions with the paper about the terms of a potential investment, The Wall Street Journal reports.
New York Times Co. reached a deal with Mexican billionaire Carlos Slim to raise about $250 million, the latest in a series of moves by the newspaper publisher to shore up its troubled finances.
Under terms reached late Monday after a meeting of the Times Co. board, Mr. Slim will receive an annual interest payment of about 14% on his investment in $250 million of unsecured notes, plus detachable warrants for about 16 million shares. The warrants expire in January 2015.
The paper has struggled in the last few years, with plummeting ad revenue and subscriptions, and some, like Michael Hirschorn in the Atlantic Monthly, suggested prior to the deal that the paper may not make it past May in its current state. Though the likelihood of a springtime demise for the Times was probably unlikely, it underscores the dire nature of the paper’s financial status.
The paper has taken some steps already to extend its life expectancy, such as slashing dividends, a significant source of income for the paper’s owners.
Seeking a large investment may is the next step, and the company has made public statements insinuating that it would be open to the idea of the kind of large investment now reportedly coming from Slim.
An investment of $250 million will help the New York Times stay alive for awhile, but it is not enough to sustain it over the long term. The New York Times Company had some $1 billion in debt and only $46 million in cash reserves as of October.
Other wealthy investors have been floated as potential lifelines for the Times, including David Geffen, Michael Bloomberg and Rupert Murdoch. The Atlantic Monthly reports that Murdoch, “after overpaying wildly for The Wall Street Journal, seems to be tempted by the prospect of adding the Times to his portfolio.”
Whatever happens as a result of Slim’s investment, the Times is bound to undergo substantial change over the next few months as it attempts to adapt its business model to the current economy and the changing appetite for news in American and around the world.