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December 19, 2013
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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.”
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 Peña Nieto to make
the telecommunications industry more competitive, and noted their own
relationship to Slim, described as controlling “telecom colossus América
Móvil.” 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.”
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