Henry Blodget, the analyst for Silicon Alley Insider who scrutinizes NYT deals like the rest of examine our pocket change, has uncovered via SEC filings some curious caveats to the $250 million Carlos Slim loan the NYT got last February.
Here's a summary of Blodget's findings, as published over the weekend:
1. In return for the $250 million, Slim got paid a $4.5 million "investor funding fee," which sounds curiously like a pawnbroker payment.
2. Slim gets annual interest payments of 14% on the whole amount -- which, according to Blodget, adds up to $210 million over the six years of the loan, only slightly less than the loan amount itself.
3. Slim gets the right to buy almost 15 million shares of NYTCo stock at $6.36. Right now, the stock is trading at $6.48 a share.
4. The NYTCo. can't borrow any more money until next March. That's gotta be tough for a company that has been basically living on loans.
5. No mortgages of any properties allowed! (Remind us to never get into a game of Monopoly with Carlos Slim.)
6. Slim gets the cash from the sale of any properties in excess of $10 million. "In other words," Blodget writes, "if NYTCo sells its Red Sox stake for $150 million, $140 million will likely go straight to Carlos." Ouch.
Or, if it prefers, the NYTCo can buy tangible assets that will move to Slim's control if the company goes under.
Making this many-strings-attached deal with Slim gives you some idea how desperate for cash the NYTCo has gotten.