Peter Kafka

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Why the New York Times Took Carlos Slim Over David Geffen


The New York Times turned down a chance to borrow money from Hollywood mogul David Geffen last winter, and went with Mexican billionaire Carlos Slim instead.

So says he New Yorker, which has an extensive profile of Slim in this issue. Writer Lawrence Wright says that when Geffen learned that the Times was working on a deal to borrow $250 million from Slim, he offered to make the loan on the same terms, but was rebuffed by  Arthur Sulzberger Jr.

The Times chairman, Wright says, told Geffen’s people he preferred to work with Slim because the telco billionaire already owned Times shares and because “he was reportedly also worried about Geffen’s ambition to take over the company.”

Where would Sulzberger have gotten that idea? From Geffen, of course.

Wright also reports that Geffen offered to buy the publisher outright last September; he says Geffen made the offer via Steve Rattner, the media banker turned Obama adviser who is one of Sulzberger’s closest confidants.

The pitch: Sulzberger would oversee the New York Times’s (NYT) editorial operations, Geffen would handle the business side, and eventually the entire business would be handed over to a nonprofit foundation. Obviously, Sulzberger turned that one down.

Wright’s piece–which is behind a pay wall, so it will be interesting to see how much of the story gets circulated via the Web–is first and foremost a profile of Slim, and secondarily about the Times. So it doesn’t spend much more time on Geffen or the notion of other white knights for the paper, a la Google (GOOG).

But in just a few paragraphs, the article does seem to sketch out Geffen’s desire to associate himself with the Times in whatever way he can: Buying it outright, lending it much-needed money or buying some of its stock (via Harbinger Capital).

For now, the Times is controlled by Sulzberger and his extended family, who have repeatedly insisted that they’re not interested in parting with it. Then again, that’s what the Bancroft family always said about Dow Jones and The Wall Street Journal. And those properties are now a part of Rupert Murdoch’s News Corp. (NWS)–as is this Web site.

If the Times ever does need a deep-pocketed buyer, Geffen has made it very clear he’s available.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work