Reaction Paper

The Cost of The Times- Robber Barons, The Old Grey Lady and Ethics in American Media Investments

The April/May 2009 Issue of the American Journalism Review featured the article, “A Dubious Benefactor” by AJR Senior Contributing Writer Sherry Ricchiardi. In this article Ricchiardi contemplates the “journalistic ramifications” (Ricchiardi, pg 1) of the New York Times relationship with its most recent investor, Carlos Slim. “On January 19, the Times Co. accepted a 6.9 million loan at 14 percent interest from Slim, who already owns a 6.9% stake in the company.” (Ricchiardi, pg 2) In fact, before Slim became a potential benefactor for the Times, they themselves had doubts regarding his credibility as a legitimate business man. Eduardo Porter summarized Mr. Slim’s business strategy in his August 27, 2007 opinion/editorial column, “Mexico’s Plutocracy Thrives on Robber-Baron Concessions” as such: “Like many a robber-baron- or Russian oligarch, or Enron executive- Mr. Slim calls to mind the words of Honoré de Balzac: ‘behind every great fortune there is a crime.’ Mr. Slim’s sin, if not technically criminal, is like that of Rockefeller, the sin of the monopolist.” (Porter, pg 1)

Carlos Slim Helú is a Mexican businessman whose investment interests lie primarily in the field of telecommunication. Upon writing this paper he is currently the third wealthiest person in the world whose total net worth, according to Eduardo Porter “is equivalent to slightly less than 7 percent of Mexico’s total production of goods and services- one out of every 14 dollars’ worth of stuff made by all the people in the country.” (Porter, pg 1) Slim has recently made attempts to change his public perception from that of the greedy monopolist to one of a corporate philanthropist by contributing to several charities and acting as the head of the Latin American Development Fund.

Ricciardi’s article focuses primarily on the backlash caused by Eduardo Porter’s article and the ramifications of Slim’s investment in the New York Times and its current reputation as the paper of record. Her concerns are twofold- will Slim’s involvement in the Times lead to censorship, either externally or via self-censorship out of fear of reproach? As well as- how will Slim’s business practices, often deemed ruthless, affect operations at the Times?

The intimidation machine has already begun to churn; Ricchiardi opens her article by describing a telephone call received by Times Editorial writer Eduardo Porter from Slim’s office regarding his 2007 “Robber-Baron” article. Ricchiardi goes on to bring up a separate incident involving David Luhnow, Latin American Bureau Chief of the Wall Street Journal. Luhnow describes being asked to meet with Slim himself regarding an interview series Luhnow published referring to Slim as a “genius monopolist” who has a fascination with “Genghis Khan and deceptive military strategies.”(Ricchiardi, pg 3) According to Luhnow’s account of the meeting Slim presented an itemized list of grievances he had with the article and inquired as to why Luhnow “harbored ill-will against him.” (Ricchiardi, pg 4) This obviously points to Slim’s intent to intimidate and influence the press, including members of the press corps with which he has a cordial relationship. Since Slim’s “rescue” of the Times there has been little to no coverage on the New York Times either in print or online speaking about Slim or his businesses with the exception of mentioning him in passing as a new primary shareholder. There is also no mention of his companies, the largest being Telmex, which is currently in Congressional regulations hearings in Mexico. The recent Congressional hearings and there effects on the stock value of Telmex was picked up in Reuter’s business as well as other world and business publications. The lack of any mention of regulatory hearings, the recent changes in Mexican telecommunication laws, or the endless stream of Mexican FCC probes into Slim’s business practices point to the Times staffers self-censoring.

In terms of Slim’s business practices, there are several wary spectators to this business deal, including the Seattle Times, who recently editorialized that “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.” (Ricchiardi, pg 2) However, Columbia University Journalism and Sociology Professor Todd Gitlin told Reuter’s he believes “to invest and not seek influence would bolster Slim’s reputation outside Mexico. It would be foolish of him actually to meddle with the paper. He would benefit from a global reputation of being above mere meddling.” (MacMillan/Randewich, pg 2) Personally, I would like to believe that this was true, but with his proven track record of “meddling” with the editorial content, I find it hard to believe that Slim has the best interest of the New York Times at heart.

Like any investment, interest rates rise and fall and a patience and savvy investor will reap the benefits of a long-term relationship in due time. Whether Slim is willing to sit patiently (and silently) by and wait for his investment to turn a profit has yet to be seen, but the signs in place are indicating that the answer is no. A $250 million loan at 14 percent interest to one of the most notorious businessmen in the world is a difficult thing to pay back. Monday morning the New York Times announced “plans to eliminate 100 newsroom jobs- about 8 percent of the total staff—by year’s end.” (Perez-Pena, pg 1) While this is sad news for the Times and its staff, it speaks to the cost of doing business in today’s global economy and the cost of doing business with a man like Carlos Slim.


Works Cited:

“A Dubious Benefactor”, Sherry Ricchiardi, American Journalism Review, April/May 2009
“Mexico’s Plutocracy Thrives on Robber-Baron Concessions”, Eduardo Porter, the New York Times, August 27, 2007
“New York Times May Find Benefactor in Slim”, Robert MacMillan and Noel Randewich, Reuters, January 19, 2009
“Times Says It Will Cut 100 Newsroom Jobs”, Richard Perez-Pena, the New York Times, October 19, 2009