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Financial problems put ‘The New York Times’ expansion plans on hold

US daily looks toward Mexico with Carlos Slim’s help after it cancels Brazilian edition

The New York Times
The entrance to the 'The New York Times,' in New York City. AFP

The global crisis that has hit the media over recent years has even reached prestigious titles such as The New York Times, whose efforts to expand internationally have been conditioned by financial difficulties.

After an unsuccessful attempt to launch an edition in Brazil, the newspaper has now set it eyes on Mexico. Nevertheless, its plans for an online Spanish edition, aimed mostly for a Latin American audience, have still not gotten off the ground. But Times officials are far along with their plans and have visited their southern neighbor to prepare for the launch.

‘The Times’ put the Brazilian project on hold because of financial difficulties

Recently, The New York Times has begun to publish some of its articles in Spanish online, as the publication announced earlier this year. They are made available in the newspaper’s Americas section as well as on its Twitter account, which for now counts on just over 31,000 followers.

The newspaper is hedging its bets on attracting a large readership in Mexico and Colombia, both considered important markets after executives ditched their plans for a Brazilian edition.

Last May, about a half dozen executives from the Times’ editorial and marketing areas met in São Paulo with the supervisors of EL PAÍS Brasil to get firsthand experience of what it was like publishing an edition in the Portuguese-speaking country.

They were told about translation problems and readers’ trends when it comes to selecting news. Nevertheless, The Times put the project on hold on account of financial difficulties.

Backing the launch in Mexico will be billionaire Carlos Slim, who in January became the newspaper’s largest investor by acquiring 16.8% of the company’s shares. But according to Bloomberg’s latest database figures, his stake in The New York Times is now about 12.33%.

Slim came on board at The New York Times in 2009 at a moment when the economic crisis was taking a tough toll on the US economy. The Mexican magnate invested $250 million, which helped the company weather a double disaster – the financial crisis and the media’s loss in revenue – which has led to more than 300 layoffs of journalists since 2008. Last year, about 100 employees lost their jobs at The Times.

The New York Times only began showing a profit this year after it posted $1.5 million in losses in 2014.

The current gains are possible, despite the fact the newspaper’s revenue has remained virtually unchanged, with a drop of 0.8% in the first three quarters, compared to the same period in 2014, which puts the company’s worth at $1.134.5 billion.

‘The New York Times’ may encounter difficulties in keeping its independent editorial line in its new edition

According to data published for investors on September 27, the company’s total debt is listed at $430 million, which includes other capital repayment obligations.

Any eventual presence of an American newspaper in Mexico would help Slim increase his range of activity in a country where he is already omnipresent.

This connection, however, has raised questions about the difficulties The New York Times may encounter in keeping its independent editorial line in its new edition, with a shareholder who wields much influence in the country.

With América Móvil at the head, Slim’s vast empire ranges from mining and telecommunications to construction.

“In the latter sector – for his companies – he controls everything, from the production of copper wire to the broadcast," said analyst Samuel García.

With so much power, Slim is an unavoidable partner for governments, according to experts.

“He is Mexico’s richest man and his companies have to deal with all the regulators,” García said.

Through this proximity to power, his relationships vary. For example, he is said to have excellent ties with Mexican leftist leader Andrés Manuel López Obrador, who now heads the National Regeneration Movement (Morena). Slim undertook the reconstruction of the historic center in Mexico City when López Obrador was head of the Federal District.

But his relationship with President Enrique Peña Nieto, and the ruling PRI party, have worsened over the years. The two men’s friendship hit its lowest point last year when the Mexican government imposed restrictions that stopped América Móvil from its nearly monopolistic expansion.

The battle, which Peña Nieto won, ended with the announcement of a breaking up of the company. "Without a doubt, it is one of the biggest conflicts to have occurred during this administration,” said García.