cindy capitani

cindy capitani
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August 11
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wordsmith. left the paragraph factory for a private atelier. www.cindycapitani.net follow me on Twitter @cindycap

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Editor’s Pick
MARCH 12, 2009 11:49AM

What changes if the New York Times goes bankrupt?

Rate: 11 Flag

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.

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Comments

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Cindy, one of the ironies that is not lost on me with this story is how many readers look to the Times' financial writers like Gretchen Morgenson for guidance in their own portfolios. Looks like the Times needs about a 100 Gretchens to dig itself out of this financial hole.
It makes me sick to think of the NYTimes dying. There is no other paper like it on the planet. It is the life blood of America.
Hi Cindy, this is fascinating. Very sad of course but a pretty much universal downfall. I often wonder how print newspapers have nade it this far with the interbutt and all.
I kind of like the idea of the Mexican billionaire taking over though. Might get a viewpoint a little different than Rupert Murdoch!
Never heard of Carlos Slim Helu. Maybe I should read the paper more often.
I wonder what Jim Cramer has to say about this...

Nawwww... only joking.

i read two papers every day. I could not imagine not having them. I'm afraid I might find out.
If the Times fails and continues to publish with new ownership and new leadership. It will continue is name only. My guess is that the press will change completely.
Cindy, you'll have to post about the Diesel Chevette sometime. As far as the Times goes, I'm afraid. I don't think the latest Sulzberger Progeny has been a good steward of the paper.

The Gray Lady is on a decline. How will journalism reinvent itself?

You're not going to get to know what's going on in the world from embedded reporters, or GE d/b/a NBC or the Murdoch organization. rated. congrats on the EP, too.
If the Times goes into Chapter 11, it will attract plenty of buyers for some of its parts, even unprofitable ones (such as the Boston Globe). My guess is one of the big internet companies would end up owning the paper--I doubt it will disappear. What will be eliminated will be the stockholders, which, as with a lot of newspapers, are divided into common and a special class for family members. I have to think that this is one, if not the principal reason, the company has underperformed.
That's the truth designanator!

It was I good piece JL -- I know I commented. I hope we both get to ride this out!

Midwest, I agree. It's a scary thought. I have to admit tho, that I too have gravitated to the Web ... and there's just no $$ in it.

That's a good attitude Trig. It just scares me tho because I worry about motives. Then, everyone thinks objectivity is dead, tho i have to say it's what we strive for. Print really doesn't have a pulse anymore...but with no profit on the web, I don't know how this will shake out
Totally scary thought. Wow, what are we going to do without investigative reporting?
I think Rupert should buy it and turn it into a good paper.
Actually, Brian, I wonder what he'd say... it's been doomsday for print for a few years, so it's not just the economy.

you're right Michale, it's changing completely. And sometimes that's a good thing. Time will tell.

Thanks Sheep. The Diesel Chevette was truly a wonder car!! The reinvention is hard w/o $$. I guess it's OSers to the rescue!

Maybe you're right Con. Maybe there will be a bidding war of sorts. I think Slim had a motive in the purchase that was beyond a future sale. But who knows. And then there's the Globe. And yes, you're right, having to answer to stockholders is a reason for the demise. Every layoff at my Gannett-run paper was in response to quarterly earnings.
Spud and T.S, I'm detecting sarcasm ... ;)
I hope the New York Times goes bankrupt. The paper has not been about objective news for years and has an editorial bias that I think is not helpful. Change will bring new opportunities.
McGarret, you could be right. Be it Carlos Slim, or some other group, who knows. I do think they're fairly objective tho...
Who could have guessed that one day all newspapers would be Hearse newspapers? Sad, indeed, but given how so many papers, including the NYT, gave Bush and Co a pass on so much of their villainy during the early years, perhaps it's poetic justice. Maybe Carlos Slim will put Judith Miller in charge of the New New York Times.