The New York Times Co. is desperately searching for money and could find some by planning to borrow as much as $225 million against its new Manhattan headquarters (pictured). The media company, which owns 58% of its building, has hired Cushman & Wakefield to find financing either through a mortgage or a sale-leaseback agreement.
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Although the move may seem prudent as the company sees itself with diminishing ad revenue and lagging subscriptions, many fear the strategy could haunt the company in the long term if the Gray Lady doesn't stop the bleeding now. After all, isn't this the type of strategy that got many American homeowners in trouble over the last couple of years, taking money out of their properties only to find themselves over their heads a few years later?
The money looks easy, but what happens down the line if the Times can't make its mortgage payments from the revenue it generates now? Will it just have to admit defeat and be forced to sell itself to a deep-pocketed billionaire such as Rupert Murdoch or choose to follow the lead of its peer Tribune Co. and file for bankruptcy? The choices are tough, and in this economy there seems to be no easy answers. - Gerald Magpily
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