Carlos Slim, An Investigative Reporter’s Dream, Saves The Times

The New York Times will probably not be writing a piece on the fact that Carlos Slim has occasionally been accused of creating his great wealth in part because he has been "close" to Mexican presidents and other high officials.

In the US, he would be a perfect target for investigative reporters curious about the ongoing relationships between the very rich and the very powerful politicians who make and enforce the laws.

According to The New York Times, Slim will put $250 million into NYT, the paper’s parent. "Under the terms of the deal, Mr. Slim, who already owns 6.9 percent of the Times Company, would invest $250 million in the form of six-year notes with warrants that are convertible into common shares."

The press release does not mention any of the controversial parts of Mr. Slim’s past which has to make Times editors uncomfortable.

If The Times were located in Mexico, Slim would probably get his share of headlines, some of which might not be flattering. Forbes, usually a friend of the very rich, mentions in its profile of Slim that his close relationships with the top echelon of his country’s politicians have drawn some measure of concern.

Allan Mutter points out that the TImes itself has been unkind to Slim in the past:

"In 1990, the government of President Carlos Salinas de Gortari sold his friend Mr. Slim the Mexican national phone company, Telmex, along with a de facto commitment to maintain its monopoly for years. Then it awarded Telmex the only nationwide cellphone license.When competitors were eventually allowed in, Telmex kept them at bay with some rather creative gambits, like getting a judge to issue an arrest warrant for the top lawyer of a competitor. Today, it still has a 90% share of Mexico’s landline phone service and controls almost three-quarters of the cellphone market…".

Did The New York Times Company have any choice over who put money into the firm? Probably very little. The newspaper industry is viewed as a poor investment. Several newspaper chains are already in the process of liquidation, particularly Journal Register and Gatehouse. The third largest newspaper company, McClatchy (MNI) is in deep trouble. A number of the nation’s largest dailies, including The Rocky Mountain News, are for sale and some will be closed if they do not find buyers.

NYT has $400 million in debt due in May. It needs to get itself time to sell off some of its properties like The Boston Globe. Having Slim come to the rescue may be a bit of an embarrassment to The Times. His past business practices may be pristine, but there have been reasonable observations that they have not been.

Douglas A. McIntyre