NYT writedown on Boston Globe?

By

Bloomberg reports that the New York Times Company says it is studying taking a writedown on its purchase of New England media properties, most prominently, the Boston Globe. One advantage of such a writedown is to get the bad news out of the way, and start reporting good news with no overhang.

Another advantage is that it could make it easier for the company to sell some or all of the assets. Even if it receives less than it paid for the assets, it can still book a profit, if the assets have been written down below the sales price.

"Conceivably, this could be a precursor to selling the Globe,'' said Ed Atorino, an analyst with Benchmark Co. in New York. ``It doesn't mean they are going to do it, but they are recognizing the reduced value of the Globe.''

This move also has to be understood in the context of the looming battle over the company's dual class shareholding system. Could Pinch be considering his own spin—off of assets? If so, what does he plan to do with the money?

Hat tip: Ed Lasky

Thomas Lifson  11 6 06

Bloomberg reports that the New York Times Company says it is studying taking a writedown on its purchase of New England media properties, most prominently, the Boston Globe. One advantage of such a writedown is to get the bad news out of the way, and start reporting good news with no overhang.

Another advantage is that it could make it easier for the company to sell some or all of the assets. Even if it receives less than it paid for the assets, it can still book a profit, if the assets have been written down below the sales price.

"Conceivably, this could be a precursor to selling the Globe,'' said Ed Atorino, an analyst with Benchmark Co. in New York. ``It doesn't mean they are going to do it, but they are recognizing the reduced value of the Globe.''

This move also has to be understood in the context of the looming battle over the company's dual class shareholding system. Could Pinch be considering his own spin—off of assets? If so, what does he plan to do with the money?

Hat tip: Ed Lasky

Thomas Lifson  11 6 06