When the World’s Richest Billionaire Owns Your Paper
Carlos Slim is the world’s richest person. His father, JuliÃ©n 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,AmÃ©rica MÃ³vil, 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. AndrÃ©s 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 PÃ©rez 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.”
Contrast this coverage to a June 2012 story by McClatchy (6/17/12) headlined “Monopolies Hold Back Mexico’s Economy With High Prices, Poor Service,” in which Tim Johnson analyzed the effects of Mexico’s public and private monopolies, prominently including Slim:
Mexico is a country of concentrated economic power, and in some cases outright monopolies. It’s an arrangement that limits Mexico’s hopes of a thriving economy, chokes its consumers, discourages competition and prevents better products and services from emerging in the marketplace. It’s been this way for decades, and analysts caution against expecting change anytime soon.
Johnson explained how Slim’s Telcel charges up to 28 cents per minute when clients call people who use a competing system; the article also quote consumer activist Alejandro Cavillo saying that “these high prices are what is behind the fortune of Carlos Slim and what has made him the world’s richest man.”
Unlike the Times, McClatchy doesn’t bend over backwards to credit the views of Slim and his defenders, but instead draws from an array of government, business, think tank and activist sources to paint a vivid picture of the impact on Mexico of monopolies like Slim’s.
McClatchy also published an article by Johnson headlined “The Town Carlos Slim Forgot” (7/28/13), focusing on a Mexican Indian village that built its own telephone network and avoided Slim’s monopoly. The outlet published commentary (1/12/13) taking aim at Slim and other Latin American elites for paying low tax rates, and noted in another article (2/14/13) that, unlike Bill Gates, for example, Slim refused to sign a pledge to give away half of his wealth, reporting that he “avoids projects to strengthen democracy or civic participation.”
The New York Times certainly covers Slim, but most coverage consists of dispassionate reporting on his business dealings. A search on the paper’s website yields 408 pieces mentioning Slim published between September 2008, when he first purchased a stake in the Times, to October 2013. A hundred and seven of the pieces were found in the Dealbook business blog, and most of these offered neutral reporting on Slim’s ventures. For example, there have been dozens of articles published since 2012 about Slim’s attempt to take over Dutch telecom firm KPN.
Places where criticism of Slim would seem obvious sometimes find him conspicuously absent, as when Times columnist Thomas Friedman (2/23/13) wrote that Mexico has “big energy, telecom” monopolies that are harming the country’s economy—without naming the Mexican monopolist who owns much of the company that pays Friedman’s salary.
Incidents of public pushback to Slim’s business practices have also gone unnoted, as when hundreds demonstrated when George Washington University gave him an honorary degree (Huffington Post, 5/17/12); Mexican immigrant groups threatened boycotts against his telecommunications companies (AFP, 5/8/12); and activists in the U.S. and Mexico formed the group Two Countries, One Voice to rally against Slim, recruiting California lawmakers to the cause.
Given the financial relationship between the Times and Slim, the paper should be going out of its way to provide investigations and criticisms of Slim’s financial empire; instead, when the paper does report criticisms, it is sure to balance them out with the multibillionaire’s point of view—leaving the toughest reporting largely to competitors.
There are a few exceptions to this pattern, like a 2009 Times piece (2/15/09) looking at Slim’s expanding stake in media companies—though the piece did include a number of Slim defenders. “We journalists cover so many bad guys here in Mexico, so many big egos, that Slim, despite all his faults, doesn’t appear all that bad,” said journalist Riva Palacio in the last line.
In March 2013, the editorial board (3/31/13) praised promises by Mexico’s new president Enrique PeÃ±a Nieto to make the telecommunications industry more competitive, and noted their own relationship to Slim, described as controlling “telecom colossus AmÃ©rica MÃ³vil.” In May (5/19/13), David Carr, in a longer piece on media monopolies, dedicated two sentences to pointing out that Slim owns most of the telecom industry in Mexico and that he had recently faced protests.
But you’ll find the paper’s sharpest criticism of Slim in an op-ed from 2007, a year before he became an investor in the Times. In it, Eduardo Porter (8/27/07) condemns Slim as a “robber baron.” Porter writes that “Mr. Slim’s sin, if not technically criminal, is like that of Rockefeller, the sin of the monopolist,” and takes aim at both his immense wealth and anti-competitive practices.
Perhaps the paper was feeling like it had given its future investor a raw deal. By December of that year (12/14/07), it published a reported piece calling Slim a “new breed of billionaire” who “has pledged billions of dollars to his two foundations that will aid health and education.”