Mexican Billionaire To Buy Stake in New York Times

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.

Source: Time Magazine
Source: Time Magazine

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.

Journalism Bailout May Come To A Paper Near You

Several have predicted that there will be some kind of Government intervention in the media industry in 2009 as traditional media continues to struggle. Though it is unclear as to President-Elect Barack Obama’s views on such a move, many see a clear need for a bailout.

Back in November, Connecticut State Representatives petitioned the sate to subsidize Bristol Press and The Herald of New Britain. Though the state did grant tax relief and training subsidies to the papers, no cash was given out.

Sara Catania recently argued in the Huffington Post for government-subsidized journalism, which would provide grants for journalists. Getting paid by a non-profit entity funded by the government would allow for some distance between journalists and government and restrict any conflict of interest problems.

Sara Catania
Sara Catania

Many disagree with such assistance to the media or to journalists in particular. Blogger Duncan Riley writes, “If Sara Catania cannot find adequate compensation for her work, then as it would be in any other person, she needs to adjust what she is doing, or simply find another line of work.”

The issue remains whether or not journalism can be seen as a public service, whether the investigative reporting that results from journalists should be supported even if it is not as profitable as it once was. If journalism can be seen to have a value above its market value, then the government should consider stepping in, as it does with every other public good (parks, museums, etc.). In order to employ journalists, who, as educated and intelligent people on the whole, could easily find other work, someone has to pay them decent wages.

“The late, great David Halberstam once described the life of a journalist as a donation to society, and I can abide that, to a point,” wrote Catania. “I never expected to rake in the bucks, only to make enough to contribute my share to the family coffers. It seems a reasonable expectation.”

The issue of deserved pay aside, it may be incomplete to argue that new media is hands down the future of journalism. It certainly has a role to play and has changed the way news organizations present their news and the way some news breaks, but it is choppy at best. Though traditional media should adapt to the evolution of new media, new media do not break the kind of news that a traditional news organization does.

“Those among us who are dedicated to the work, who have the experience and the desire and the hunger to continue, want a chance to do what we love and keep the stories coming,” Catania wrote. “We don’t promise that the stories will be flattering, but we do promise that they will be honest, fair and well-reported. We can’t hang on much longer.”