Carlos Slim, the world’s second-wealthiest person, is now the largest single holder of class A shares in the New York Times, after he exercised warrants he was issued in 2009 after loaning the struggling company $250 million at the height of the financial crisis. Slim’s stake in the company now stands at just under 17 percent, according to the Financial Times, after he picked up 15.9 million shares.
While Slim’s ownership stake has risen, the Ochs-Sulzberger family, which has owned the paper for more than a century, retains control. The family trust owns all of the class B voting shares, allowing them to elect approximately 70 percent of the board.
The New York Times, like many print publications, has struggled with the rise of the digital age. It has recently streamlined its operations, selling the Boston Globe, and has begun charging for its online content. According to its most recent quarterly earnings report, the paper boasts 875,000 paying digital subscribers. Shares have also increased in value since Slim first bought a stake in the company with his 2009 loan.
In late 2014, the newspaper granted buyouts to 87 volunteers, but fell short of its buyout goal. As a result, 21 more employees were laid off.
“These and other staff reductions throughout the organization are necessary as we confront the realities of a radically changing industry,” publisher Arthur O. Sulzberger told staff in a message in December 2014.
According to Slim’s spokesman Arturo Elias, the investor has no plans to exert any control over the management of the company. “We see this as a financial operation,” Elias told the Financial Times. “Nothing more … we have no intention at this stage of any more buying or of selling.” He went on to add that Slim had faith in the company’s management and in the brand.
The purchase was just the next step in Slim’s 2009 loan process. As part of the terms of the loan — which also came with a 14 percent interest rate — Slim received the warrants to purchase shares at a near-50 percent discount from the current trading price. NYT shares ended the day on Wednesday at $12.28.
Times Co. received $101.1 million from Slim exercising his warrants, which it intends to use to by back class A shares. ““We believe a share repurchase program in this instance is an appropriate use of the cash proceeds,” said CEO Mark Thompson in a statement.