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Influence Peddling And The NYT Bailout
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January 20, 2009, 07:09 PM
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The NYT reported today:

The New York Times Company said Monday it had reached an agreement with the Mexican billionaire Carlos Slim Hel?? for a $250 million loan intended to help the newspaper company finance its businesses. ...

The deal comes as the Times Company looks to raise money amid flagging advertising sales and approaching deadlines to pay back $1.1 billion in debt in the next few years. ...

Mr. Slim will receive no representation on the company’s board or any shares with special voting rights like those of the Sulzberger family, which controls the company. Nonetheless, when Mr. Slim exercises the warrants, he will be among the largest single shareholders in the Times Company, owning up to 17 percent of the common shares outstanding.

The Sulzberger family members own about 19 percent of company and control it with a special class of voting shares.

Mr. Slim, one of the wealthiest people in the world, controls phone companies and has major investments in retailing, construction, banking, insurance, railroads and mining. In March, Forbes magazine estimated his fortune at $60 billion.

Mr. Slim first approached the Times Company in November, people briefed on the discussions said.

The net present value of the New York Times` expected future cash flows isn`t worth all that much, but, if you already have tens of billions of dollars, it sure could come in handy to have the NYT on your side.

The future of the media business looks a lot like its past. In the 18th Century, writers didn`t have good ways to get reliable cash streams from their intellectual nonproperty, so they were constantly working to get rich people as patrons.