New York Times To Pay Back Overlord Carlos Slim -- Who Made $150+ Million Saving The Company

Carlos Slim

The New York Times announced that it will pay back Mexican billionaire Carlos Slim in 2012, a few years before the $250 million loan is actually due.

This will no doubt come as a relief to NYT shareholders, as the Slim loan carries an usurious interest rate of 14%+ per year.

Once the money is paid back, Slim will still retain options to buy 10% of NYTCo at $6.36 a share.

Felix Salmon calculates that in return for saving the New York Times from bankruptcy–an outcome toward which the company was hurtling when Slim loaned it $250 million at the 11th hour in January 2009–Slim will make $150+ million in profit over three years.

It doesn’t suck to be the lender of last resort.

The New York Times did not explain how it plans to pay the Slim money back. The company won’t likely have that much excess cash sitting around by then, so it will likely roll at least some of the debt over on more favourable terms.

The NYT’s frantic financial moves in 2008 and 2009 bought the company time, and bankruptcy is no longer a near-term concern.  Other than making vague noises about transitioning to digital, however, the company has not yet articulated a compelling long term plan. 

As the digital business generates far less profit than the paper-based business did, we still still expect NYTCo will eventually have to go through a major restructuring.

See Also: Sorry, NYTCo, We’d Like To Work With You, But We’re Not Going To Blow Smoke Up Your arse

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