The New Billionaire Behind the New York Times
A largely unknown billionaire is staking millions on a troubled newspaper. Why?
Jan. 22, 2009— -- Carlos Slim is unfathomably wealthy and undeniably powerful. Praised as shrewd and criticized as ruthless, the telecommunications mogul stands atop a fortune that rivals or exceeds those of business luminaries like Bill Gates and Warren Buffet.
So why would someone as successful as Slim -- who is estimated to be worth some $60 billion and was ranked by Forbes magazine as the second-richest man in the world last year -- risk massive amounts of cash on The New York Times, the storied newspaper company that, like the rest of the country's newspaper industry, is struggling beneath a dismal balance sheet and plummeting ad revenues?
One theory posited by Slim watchers: Because he can.
The $250 million that Mexican-born Slim is investing in The New York Times Co. -- a move announced late Monday -- is "tortilla money," said Riordan Roett, the director of Western hemisphere studies and the Latin American Studies Program at Johns Hopkins University.
"It is cheap money ... that is, not much [money] given his fortune," Roett said in an e-mail to ABCNews.com. It's "like saying I can afford pennies for tortillas."
In an interview with ABCNews.com, Slim deputy Arturo Elias downplayed the significance of the Times investment, which comes in the form of loans through Slim's Banco Imbursa and Inmobiliaria Carso companies.
"It's just another business. … The bank has done maybe thousands of loans and this is one more, and it's just that," said Elias, who is the director of Inmobiliaria Carso.
Juan Carlos Hidalgo, the project coordinator for Latin America at the CATO Institute, said Slim doesn't have much to lose.
"What happens if he goes wrong? He can just go back and start anew," Hidalgo said. "It's not a risky gamble when you have your bases covered."
Not that Slim expects to lose money. Asked about the wisdom of investing in what appears to be a crumbling newspaper industry, Elias expressed confidence in Slim's choice.
"We see it [the New York Times] as a company that knows very well how to handle information and deliver information," Elias said, "and we understand what you're saying is that paper is going down. But the information is going to be somewhere [and] we think the New York Times is doing a great job in delivering information.
"We think it's a great brand," he added. "We think it's a good financial opportunity. And that's what we thought to make these investments."
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