What Will We Do If the New York Times Tanks

The short answer is what I'm doing right now, which is Googling my way to other sources on a story the Times itself resolutely refuses to tell.

The latest and most reliable dispatch on this crisis comes from Richard Siklos of Fortune, who reports 1) that former Hollywood mogul David Geffen has offered to buy the 19% stake in the Times now held by Harbinger Capital Partners (a hedge fund), with no deal struck so far; 2) that the Times owes $250 million -- borrowed at steep interest rates -- to the Mexican media billionaire Carlos Slim. Though the company has actually increased its print circulation revenue in the past two years and now has more than 830,000 print subscribers, it lost $74 million last quarter and according to one analyst (Craig Huber of Barclay Capital), its common stock is set to slide within a year from about six dollars to just one buck.

Given that prospect, how can the Sulzbergers--who control the paper through their supervoting stock--pay Slim back? According to Gawker they don't have the cash, and even at current prices they'd have to give him 48 million shares of common stock, which is far more than the 8.9 million they own. And the longer they wait, the less the stock may be worth.

Of course the company can't be sold or surrendered to Carlos Slim or any other investors without the unanimous (or near unanimous) consent of the Sulzberger family. But according to Paul Tharp of the New York Post, the family has lost more than 86 percent of its fortune and their annual income from the paper is down to $4.5 million--probably a small fraction of the interest they owe each year. And that's just part of what makes this loan so scary. In nine months, the family owes the first installment of $47.5 million. If they pay that in stock rather than cash (which they don't have), it would soak up nearly all of their shares (even at today's prices), leave them with over $200 million (plus steep interest) to pay in the next five years, and effectively hand the company to Carlos Slim.

Now consider the final irony: this is one of the biggest stories in the history of the New York Times, but you won't find one word about it on the Times website or in its printed pages.

It's almost as if captain of the Titanic suddenly decided that his brush with an iceberg called for radio silence.

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