Mexican telecom mogul Carlos Slim Helu now owns more of the New York Times Company than does the Sulzberger family, which has controlled the venerable news provider since 1896. Slim became the dominant investor today after paying $101.1 million to exercise warrants that boosted his ownership of Class A shares by 11.9 million to 27.8 million, equal to 16.8% of the voting stock, the company says. The billionaire acquired the warrants in 2009 when he bought $250 million of the Times’ notes. The investment helped see the company through a dark period as print ads fell, and it had to invest in its digital platform. The terms guaranteed Slim a sweet return of 14% a year; the company repaid the loan in 2011.
The Times says that it will return the cash it just collected from Slim to investors, using it to repurchase its publicly traded Class A shares. “We believe it is in the best interests of the company to continue to maintain a conservative balance sheet and a prudent view on the allocation of free cash flow, and this one-off repurchase program should not be viewed as a change of position about our capital allocation plans,” CEO Mark Thompson says. The Times has lost about 19.2% of its market value over the last 52 weeks.
Late last year the news organization offered buyouts to 87 journalists — including some of its most senior reporters — and laid off at least 21. “These are very difficult days as we are losing some valued colleagues and friends,” Publisher Arthur Ochs Sulzberger Jr. said at the time. But these and other staff reductions throughout the organization are necessary as we confront the realities of a radically changing industry.”