Billionaire Stakes Faith In New York Times
The print newspaper business may be struggling to compete in the digital age, but the world's second richest man sees real potential in the New York Times.
Carlos Slim Helu, who made billions in the Mexican telecom industry, and his family have acquired a 6.4 percent stake of the New York Times Company. (Slim's Telmex has 90 percent of Mexico's 20 million fixed-line phones and his America Mobil is the biggest mobile phone company in Latin America).
The Times Co. is parent of the "paper of record" as well as the Boston and some other papers and is controlled by the Ochs-Sulzberger family. And it's been a rough stretch; the company's print ad revenue dropped 14 percent in the first half of the year, while its stock, NYT has dropped some 20 percent year-to date, over 30 percent over the past twelve months.
It's been a tumultuous year for the Times. Earlier this year hedge fund Harbinger Capital Partners and investment company Firebrand Partners LLC waged a proxy battle to win four seats on the company's board, in March winning two seats. The investors were also looking to institute change, which in the publishing industry, means cost cutting.
This week the company said it would cut 550 jobs by closing its distribution subsidiary. Last week the paper announced plans to consolidate the New York edition of the paper, and in May the company laid off 100 employees, including some in the newsroom, which is only touched in dire straits.
Is Slim looking to expand his empire? He told reporters that he's making the investment for "financial reasons," which would indicate that it's only business. He's not the only billionaire to see potential in the foundering publishing business. Sam Zell did after all take over the Tribune Company where he's been busy cutting costs.
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