What changes if the New York Times goes bankrupt?
When I took my first journalism class in the 10th grade, it was mandatory that we read the New York Times daily. Prior to that, I had never read a newspaper on a regular basis, other than the local weekly, and I was amazed at the amount of information I found.
People, places and things. Science, living and food. Carefully researched, brilliantly written, organized by sections, categorized by the day of the week. I was instantly hooked.
Like apple pie and Chevrolets, the Grey Lady had a guiding hand in my upbringing. Scandals notwithstanding, she influenced – and continues to influence – front pages nationwide.
But now I’m allergic to apples (common in people allergic to birch pollen I accidentally discovered), General Motors is about to go under (my first car was a diesel Chevette) and the Times? It seems its creditors might be gambling on its demise.
The Times, 58% owned by the Sulzberger family, has a billion dollars in debt, $400 million of which is due in May. Next spring, another $300 million is due.
This week, the company sold its new 8th Avenue building for $225 million, with a lease-back agreement of $32 a square foot. Buyer New York real estate investment banker W.P. Carey got a deal, but the lease rate is so below market – about half – that you have to wonder if Carey is hoping the Times goes belly-up.
If the Times tanks, Carey gets a sweetheart location at a sweetheart price, and then gets to rent out the Times space for market rate or more depending on how the economy shakes out.
There’s a good chance Carey & Co. won’t have to look far for a tenant anyway. The Grey Lady will probably just keep on publishing.
If the Times goes bankrupt, Mexican billionaire business tycoon and media mogul Carlos Slim Helu can cash in on his piece of the New York Times pie. He loaned the company $250 million in February at 14% interest. He’s said to be worth $35 billion and the third wealthiest person in the world. He could take over the paper; in bankruptcy, the Sulzberger’s votes mean nil.
The only thing constant is change. Of course I know that. But I also know, as you do, that who ever controls the media, influences what we think, know, feel and trust.
We’re in the midst of a media revolution. And the stakes are quite high.