Carlos Slim Helú: The reticent media baron

By Marc Lacey

Monday, February 16, 2009

MEXICO CITY: Carlos Slim Helú was clearly annoyed. He had invited dozens of foreign correspondents to lunch one day last fall and, after many questions about business trends, one journalist pressed him on how it felt to be worth so much in a country in which many people struggle to get by.

Slim cut off the questioner and defended his stewardship of a vast business empire. His curt tone made clear that he did not favor that line of questioning.

Slim, Mexico's richest man and now a major shareholder in and lender to The New York Times, which publishes the International Herald Tribune, has a complex relationship with the news media. He invests money in an array of television and newspaper companies and says he sees a bright future for those media companies that adapt.

But when the news media focus their spotlight on him, he sometimes gives the impression that he wants to be left alone to make more money in peace.

An avid newspaper reader of what he calls the "paper generation," Slim says he sees the shift to digital news, which has left newspaper companies struggling, as not necessarily being their death knell. He likens them to transport companies at the turn of the 20th century that grappled with the advent of motorcars. Those that stuck to horses went belly up.

With telecommunications, retailing and construction companies under his command, Slim looms large over the media landscape in his country. Notoriously thin-skinned, he does not have to pick up the phone and bellow at those who publish and broadcast something he does not like. His vast resources often translate into less-than-critical coverage.

Slim declined through his spokesman and son-in-law, Arturo Elias, to be interviewed for this article.

Raymundo Riva Palacio, a veteran journalist in Mexico City, said that after he wrote a column in El Universal newspaper in 2006 condemning Slim as a monopolist, a Slim adviser threatened to remove newspaper ads from his companies.

That was no small threat. Slim's holdings are so vast that he controls a large chunk of all advertising countrywide. Eduardo García, a Mexican journalist who runs a Spanish-language financial news Web site and follows Slim, estimated his wealth at almost $44 billion as of the end of 2008.

"I took it as part of the natural dynamic between the media and the powers that be in Mexico," Riva Palacio said, adding that the incident was quietly resolved. "That's how things work here."

Elias, the Slim spokesman, said that no ads were removed and that Slim does not use his economic might that way. "We are an important advertiser, yes, but that doesn't give us a right to meddle in the editorial side," Elias said.

Slim built his fortune buying distressed companies and turning them around, but he joined the top ranks of the world's billionaires when he bought the Mexican telephone monopoly, Teléfonos de México, known as Telmex, from the government in 1990. His critics say his political connections won him the company, but he has countered that his winning bid of $1.76 billion was above market price.

Today, even though Mexico's telephone market is ostensibly open to competition, its rates are among the highest in the world. Telmex controls more than 90 percent of the local market for fixed lines and more than 70 percent of the cellphone market. Competitors say the company throws up repeated obstacles and regulators are reluctant to act.

When it comes to the media, Slim's family businesses have invested in a variety of television networks and bought a 1 percent stake in The Independent newspaper in Britain last year.

"His leverage is tremendous," said García, who publishes a financial news Web site in Mexico City, (sentidocomun.com.mx), that tracks Slim's many holdings. "That's how he muffles all the criticisms that might come his way."

He may muffle some critics, but not all. Denise Dresser, a Mexican political scientist, regularly suggests in newspaper columns that favorable government treatment, rather than business acumen, made him rich.

"Going down in history as an evil monopolist who fleeced Mexican consumers is not an image of himself that he likes, but it's a true image," she said. "The possibility that he would throw his weight around itself acts as a gag."

But as Mexico's recession deepens, Slim's critics are multiplying. Last week, he forecast grim times for Mexico and received a barely disguised rebuke from President Felipe Calderón, who prefers upbeat assessments, and said, "Those who have received the most from this great nation" are obligated to help.

Slim bristles at suggestions that he is not doing his part for Mexico. "I think it's perverse to believe that there shouldn't be strong companies in poor countries," he told the journalists who attended the media lunch last fall.

Behind the scenes, though, he deploys a team of lawyers to fight efforts by the government to enforce antitrust laws against him.

The country's Federal Competition Commission is looking into Slim's companies. But the agency is outspent and outmanned by Slim. His companies "spend more on a single case than our entire annual budget," said an official at the commission, who insisted on anonymity because he was not authorized to speak publicly about agency matters.

Even though Slim sees moneymaking opportunities in the media, Raúl Trejo, a journalism professor at the National Autonomous University of Mexico, said Slim is not an aspiring media tycoon who dictates news coverage.

At a dinner in London in December, after Slim bought his initial Times Co. stock, a group of British newspaper editors expressed astonishment at the large size of the Times newsroom, which has roughly 1,300 reporters and editors. "He gave no indication whether he knew the size of the staff," said a participant, who spoke on the condition of anonymity because the meeting was private.

Elias said recently that Slim considered his latest investment in The Times — $250 million, for which he will receive a 14 percent interest rate and warrants that are convertible into Times Co. shares — as a business deal.

He already owns 6.9 percent of the company and has lost tens of millions on that investment. Under the new financial arrangement, that stake could grow to 17 percent, though he will receive no representation on the company's board and no shares with special voting rights.

Bankers representing The Times approached Slim with the investment opportunity, Slim advisers say. Those bankers, at the firm SunTrust Robinson Humphrey, had first approached The Times with the idea of a deal with Slim, said a Times spokeswoman, Catherine Mathis.

Besides the financial benefits, those who know Slim also see in the deal an effort to bolster his reputation by linking himself with a well-known brand.

Stung by suggestions that he is a some kind of robber baron — a label used by Eduardo Porter, a Times editorial writer, in a 2007 op-ed article — Slim has granted more interviews in recent years and expanded his philanthropic work.

"Unlike a great number of business guys who are only focused on the latest numbers, he has a variety of interests and is focusing more and more on using his wealth to improve the world," said Alvin Toffler, the futurist author, who is a friend of Slim's.

It is not merely Slim's resources that help swing coverage his way, Mexican journalists say. Rather, they say, Slim, a widowed father of six, has an unassuming, avuncular persona.

He often shuffles into events alone, his bodyguards well out of sight. Addressing the press, Slim can appear ill at ease, resembling at times a small business owner rather than Mexico's richest man.

And even when newspapers ran columns criticizing him for his recent negative comments about the Mexican economy, the front pages of leading papers in Mexico City all ran reports on Thursday of a rumored romance between Slim and Queen Noor of Jordan — speculation that was quickly quashed by Elias.

"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 Riva Palacio, the Mexico City journalist.