NYT's Sulzbergers: Broke, Dangerous

Could shady Mexican billionaire Carlos Slim become the New York Times Co.'s biggest shareholder in the next couple of years? Sure he could, easy! It all depends how greedy the (broke-ish) young Sulzberger kids are:

The NY Post runs a big speculative piece on what we will call "THE SLIM SCENARIO" today, which is slightly misleading, of course, so we'll lay out the basic factual arguments for you:

  • The NYT took out a $250 million loan from Slim at awful interest rates. They have no cash, pretty much. So they may have to pay him pack in stock. (Partially or fully).
  • Since NYT's stock price is so low, they would have to give him 48 million shares, at current prices, over the next six years to pay him back. That's way more stock than the Sulzbergers have!
  • But: the Sulzberger family holds the supervoting stock that lets them control the company. They can only sell that stock if they (almost) unanimously agree to. They would presumably have to be in extremely desperate straits to even consider turning over any significant portion of the super-stock to Slim.
  • But! The Sulzberger kids have lost most of their family fortune so maybe they want to take the money and run! Currently, the NYP reports, eight family members on the company payroll are only pulling in a combined $4.5 million per year, while the family is used to spending $20 mil per year on charities and living expenses. By rich people standards that is like being broke! Also problematic: the proceeds from any company assets the NYT sells will go to pay back Slim, not to fund the Sulzbergers.
It's doubtful Pinch Sulzberger would let Slim take control of the company on his watch (unless he had *no* other options, and we're not quite there yet), but the next generation? Maybe they just want to get their few millions and exit this shitty business, like the Bancrofts did at the WSJ. No family-owned paper lasts forever. The Sulzbergers obviously haven't been reading all those "Dangers of Subprime Loans " stories.
[NYP . Pic via ]