New York Times’ Foe and Savior Team Up

What alliance between Slim, News Corp. could mean for paper

The New York Times better watch its back: Two people who represent serious threats to its existence in its current form have come together in an unusual alliance. Rupert Murdoch’s News Corp. and Mexican telecommunications mogul Carlos Slim have discussed joining forces to make a bid for control of Formula One racing.

Given Murdoch's notorious antipathy towards the Times, News Corp. has chosen an interesting partner in Slim, the world’s richest person, considering the financial hold he has over the paper. In January 2009, Slim—already a substantial New York Times Company shareholder—floated the company a $250 million loan that included an exorbitantly high interest rate and warrants that, if exercised, would give him more than 10 percent of the company.

Murdoch’s disdain for what he sees as the elitism exuded by the Gray Lady is widely known—and so is his crusade against the newspaper, which he's been on for years now. In 2007, Murdoch paid $5 billion to acquire Wall Street Journal owner Dow Jones in a bid to directly compete with and, ultimately, shutter the Times—or own it.  In a Vanity Fair article last year, Andrew Neil, former editor of Murdoch’s Sunday Times, said Murdoch sees the New York Times as "a fat pig there for the taking."

So maybe teaming up with the man to whom the Times owes its life is the next step in Murdoch’s plan to finally take down the newspaper. Certainly the alliance doesn't seem to have sprung from any great personal respect that Murdoch has for Slim; actually, Murdoch has been known to disparage his new partner, both publicly and privately. In March 2010, responding to gossip that Slim was going to buy the rest of the New York Times Company, a Reuters staffer reported on Twitter that Murdoch said he didn’t believe the rumors of a sale, "least of all to a Mexican."

News Corp. and Slim can't really advance their move on F1 until the end of 2012, when the existing agreement between the sport’s governing body and its teams regarding commercial revenue distribution expires. Still, Murdoch has gotten the ball rolling. News Corp.’s own Sky News reported that preliminary discussions with Slim have begun, some of F1’s car manufacturers have been in talks with News Corp., and JP Morgan is advising News Corp. on the transaction. F1 is currently owned by private equity firm CVC Capital Partners.

Jack Horner, a spokesman for News Corp., told Adweek that the company would not comment on speculation.

Publish date: April 27, 2011 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT