Newspaper ownership matters in American democracy
Mexican billionaire Carlos Slim's $250 million loan to The New York Times is an ominous move that raises questions about ownership in media companies. Major media companies should not be in the hands of a capitalist with loyalties to a foreign state.
Seattle Times editorial
THE $250-million loan by billionaire Carlos Slim to The New York Times Co. is said to be innocent of any motive of influencing U.S. news and opinion. Perhaps that is so, but it would have been better had the question never come up.
Slim is the richest man in Mexico, and second-richest in the world after Warren Buffett. He became that way by buying Telefonos de México in 1990. The phone company was a monopoly of the Mexican state and it became a monopoly of Carlos Slim.
Slim used his gains to create the largest cellphone company in Latin America, América Móvil. Slim companies are said to make up one-third, by value, of all the shares traded on Mexico's stock exchange.
Of his politics, the International Herald Tribune wrote last year, "Slim has been careful not to support openly any political party."
Careful — yes.
In September, Slim bought an interest in The New York Times Co. reported at 6.9 percent. Now he has agreed to lend $250 million at 14 percent interest. The loan comes with warrants to buy stock that would increase Slim's stake to 17 percent of the company.
Slim would have a much smaller share of the votes, however, because the Sulzberger family, which has controlled The New York Times since 1896, has special shares with more than one vote. Slim will have no seat on the board of directors, at least for now.
Still, the move is ominous. Ownership matters. Slim is a capitalist with a close connection to the Mexican state. He is buying a substantial stake in the most politically influential newspaper in the United States, and he easily has the wealth to buy the whole thing.
The New York Times is under strain, as are newspapers generally. The company is mortgaging and selling off assets to meet payments on its $1.1 billion of debt. It may need a sugar daddy — and there is Carlos Slim.
The New York Times is not just a company, but an institution. It is a major player in American democracy. It should not fall into the hands of a capitalist with loyalties to a foreign state.
Copyright © 2009 The Seattle Times Company
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