By: Jeffrey Klein
Political Buzz Examiner

According to a 6-minute video produced by the labor union covering the employees of the once proud New York Times newspaper, they and their union are in desperate need of sympathy and perhaps intervention, in an effort to forestall The New York Times Company “freezes” their “Defined Benefit” pension, according to an April 22, 2012 entry in Walter Russell’s Mead’s Blog (including the video) on The American Interest.

The reporters of this notoriously Liberal newspaper typically write about the plight and fight of other companies, cities and states around the country, whose rich union benefit plans threaten their very future existence–the implied recommendation of which is to raise taxes on the rich, or from the already overburdened state and municipal taxpayers.

The Times most notable, recent stand in solidarity is with the public labor unions in Wisconsin, in their recall effort against Gov. Scott Walker, who with the newly elected Republican majority, solved his states problem. Amazingly, they were able to do it without shedding a single job, or raising a single tax.

Instead, they ended the collective bargaining power of public unions, which has always been acknowledged to be a conflict of interest in its highest form anyway, by ending the automatic collection of dues, and forcing union employees to pay a fraction of the contributions paid by private sector employees toward their health insurance and retirement benefits.

The video captures the essence of their vacuous and unreal “entitlement” mentality, in the face of financial Armageddon for their [publicly traded company], which is headed by the equally Liberal Sulzberger family, who own 19 percent of the shares outstanding–with several employees featured implying that a “strike” by employees may save their pension plan–only because they don’t realize their ultimate impotence in this situation.

Back in January 19, 2009, the NYT was facing $1.1 billion in debt, with only $46 million in cash, and $400 million in revolving credit facilities expiring in May–which if not retired, would likely have meant the end of the Gray Lady.

Enter, Carlos Slim Helu, a Mexican billionaire entrepreneur, whose many business interests include ownership of the largest land-line and cell telephone companies in Mexico, as well as 6.9% of the NYT; his net worth of $60 billion, rendered him the wealthiest man in the world according to Forbes, according to Sarah Rabil’s January 20, 2009 Bloomberg article.

Basically, Slim wrangled a $250 million, 6-year convertible-note deal, with a 14% “junk bond” interest rate, which at maturity could result in his becoming the third largest shareholder behind the Ochs-Sulzberger family and a large hedge fund–but it would cost NYT an additional $21.9 million per year in interest expense.

Slim’s investment “buys them time so they don’t have to sell the assets at a fire sale … The ability to fetch a decent dollar from asset sales is probably going to be better by the end of 2009 than now.” said Ken Doctor, an analyst at media consultant Outsell Inc. in Burlingame, California.

In a December [2009] memo to employees, Arthur Sulzberger Jr., the company’s chairman and the publisher of its flagship newspaper, called the 2009 financial outlook “daunting.” New York Times, the third-largest U.S. newspaper publisher, posted a 13 percent drop in ad sales for the first 11 months of 2008, including a 21 percent plunge in November.

A quick glance at the historical chart of NYT stock, from its own stock watch service page, pretty much reveals that the only thing that has changed for them is that they are now half way through the six year term of Slim’s notes, which is probably why management is taking this action.

All things considered, it does seem as though the employees and their labor union do hold the future of the New York Times in their hands–because if they do strike and shut down the Gray Lady…it would probably never open again.