Mexican billionaire Carlos Slim and his family have accumulated a 6.4% stake in New York Times Co., making them one of the largest shareholders in the newspaper publisher outside of the controlling Ochs-Sulzberger family, New York Times Co. disclosed late Wednesday in a regulatory filing.Mr. Slim, the world's second-richest man according to Forbes, owned 9.1 million Class A common shares as of Sept. 4.
The investment by Mr. Slim comes as the company faces financial pressure. The migration of readers and advertisers from print to the Web has led to steep advertising declines that have accelerated amid the U.S. economic slump. Print-ad revenue for New York Times Co.'s News Media Group, which includes the Times, the Boston Globe and several other papers, declined 14% in the first half of 2008, while the company's stock price recently fell to its lowest point in about a decade. Shares have fallen 32% over the past 52 weeks.
The company's performance earlier this year led to a proxy battle by the hedge fund Harbinger Capital Partners and investment company Firebrand Partners LLC, which together were seeking four seats on New York Times Co.'s board and strategic changes at the company. In March, New York Times Co. granted the group two board seats.
But the pressure on the Times to reduce costs has intensified as its performance has continued to decline. For the first time, the paper in May laid off newsroom employees as part of an effort to cut 100 jobs. Late last week, the Times announced plans to consolidate some sections of the New York edition of the paper beginning in October. And this week, the company said it will close its distribution subsidiary in January in a move that will eliminate 550 jobs.
Mr. Slim, whose wealth is valued at an estimated $60 billion, made his fortune in the telecommunications industry. He controls America Movil SA, the largest wireless-service provider in Latin America, and Telmex, Mexico's largest fixed-line company
Mr. Slim's motivations are unclear. Mr. Slim told Reuters Wednesday that the investment was strictly financial. The Ochs-Sulzberger family maintains control of the company through ownership of a special class of super-voting shares that elect 70% of the board, meaning outside shareholders have little hope of forcing change. New York Times Co. declined to comment.
By: Russell Adams
Wall Street Journal; September 12, 2008
