Monday, May 04, 2009

Bloomberg and the New York Times

It wouldn't be impossible for Bloomberg LP (a distinct entity from Mayor Bloomberg) to buy Harbinger's stake in the New York Times (NYT).

To get elected Mayor in the first place, Bloomberg had to separate himself from the LP's assets and decision-making structure. What that company chooses to do to grow itself is its business. And with them already in the media so much already, I don't see how adding a newspaper would make much difference.

The most recent investor in NYT is Carlos Slim -- Mexican billionaire. I remember reading a few cautious comments at the time wondering if he would get more favorable coverage now from the Times. At the end of the day, he got to invest because he had the money that NYT needed. I'm sure Bloomberg could buy Harbinger's stake if it wanted it and Harbinger wants to sell.

At the end of the day, NYT and any other large newspaper stock such as Gannett (GCI) is in trouble. However, NYT still has a romantic cachet attached to it -- unlike USA Today.

Therefore, I believe that the most likely outcome is that it sells itself entirely to one or more high net-worth billionaires (like Bloomberg, Slim, Burkle and so forth) along with some private equity types. It will be a bauble asset for those people -- something to brag about at a dinner party. Not an investment they can expect to make money from (at least not in its current form).

That outcome makes it tough to trade, because you never know when the offer might come and how much the stock might trade down in the meantime.

Position: None.

Originally published in on 4/29/2009 11:02 AM EDT

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