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When the World’s Richest Billionaire Owns Your Paper

The New York Times covers Carlos Slim—carefully.
 
 
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Photo Credit: By José Cruz/ABr (Agência Brasil [1]) [CC-BY-3.0-br (http://creativecommons.org/licenses/by/3.0/br/deed.en)], via Wikimedia Commons

 
 
 
 

Carlos Slim is the world’s richest person. His father, Julién Slim Haddad, immigrated to Mexico from Lebanon as a teenager, and by the time Carlos was born, the family was well-off, having acquired a number of businesses and real estate in Mexico City.

Slim took his father’s financial lessons to heart, starting a stock brokerage that slowly grew to a corporate empire. Today he owns, among other things,América Móvil, Latin America’s largest wireless services provider. In 2007, the estimated value of the companies he ran was a whopping $150 billion. In that year, Mexico’s GDP was just over $1 trillion—less than seven times as large.

In 2008, the multibillionaire purchased a 6.4 percent stake in the New York Times Company. Today, he is the second-largest shareholder in the company, with a 13 percent stake.

At the time of his first major investment, some wondered if Slim’s move would buy a blind eye from the Times. Andrés Martinez, a former New York Timeseditorial writer who later helmed the L.A. Times editorial page, noted (Slate, 2/13/09) that the purchase makes it easier for [Slim] to write off his critics in Mexico as perennially frustrated leftist whiners. If any of what they alleged were true, after all, would the enlightened and liberal New York Times allow him to become one of its largest shareholders?

A natural topic for coverage would be Slim’s telecommunications monopoly that critics charge has free rein to rip off millions of consumers. Paul Roderick Gregory (Real Clear Markets,  3/12/13), a research fellow at the conservative Hoover Institution, noted that Slim controls 75 percent of landlines, 70 percent of broadband access and 70 percent of mobile phones in Mexico.

Gregory cited an OECD study ( 1/30/12) that found that Mexico’s telecom markets are “at the bottom of rankings with other OECD countries in market penetration for fixed, mobile and broadband markets.” The OECD calculated that this virtual monopoly by Slim reduces the living standard of the average Mexican family by over $600 a year and lowers Mexico’s gross domestic product by $32 billion a year.

The OECD study did get a passing reference in a 2011 Times article ( 5/9/11) on Mexico’s attempt to break up Slim’s monopoly—which mentioned Slim’s stake in the Times in the print version, but not the online edition. The article, headlined “Mexico Takes Aim at a Titan in Telecom,” looked at a $1 billion fine that Mexico’s antitrust agency imposed on one of Slim’s subsidiaries.

After a paragraph laying out the view of regulator Eduardo Pérez Motta that big companies view Mexico as “a country of favors, friendships and privileges,” the Times neutralized this critique with two paragraphs offering Slim’s point of view:

Executives at Mr. Slim’s companies argue that they benefit the Mexican people by reaching the country’s poorer communities, while their competitors want to sell only to the rich. Indeed, in almost half of the country, [Slim’s] Telmex is the only company with any infrastructure at all, because its concession requires it to be there.

In public appearances, Mr. Slim responds to questions about monopoly power by arguing that he has taken on powerful international competitors such asAT&T and that there are multiple players in the Mexican market. He often hands out charts showing how Mexico compares favorably to many other developing countries in mobile coverage, and argues that international studies showing that Mexico’s prices are high are skewed by exchange rates. He also says that he faces a barrier because regulators refuse to grant him a pay-TV license, while cable companies now compete with him by offering phone and Internet service.

The article also treats it as an open question whether Slim’s monopolies are viewed favorably in the country: “While some Mexicans admire his acumen, others say they believe that his control over the $35 billion telecommunications market has done enormous damage to the economy.”

 
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