New York Times sells Boston Globe for $70 million
Back in 1993, the New York Times, seeking to dominate the east coast ad market, purchased the Boston Globe and some related properties for $1.1 billion.
Yesterday, the contraction nearly completed, the Times sold the Globe to Boston Red Sox owner John Henry for just $70 million.
The sale represents a 93% loss for the Times on their investment.
The impending purchase from The New York Times Co. marks Henry's "first foray into the financially unsettled world of the news media," the Globe said early Saturday. The deal will give Henry the 141-year-old newspaper, its websites and affiliated companies, it said.
The Times announced in February it was putting the Globe and related assets up for sale four years after calling off a previous attempt to sell it. The company's CEO said at the time selling the Globe would help the company focus attention on The New York Times brand.
Times spokeswoman Eileen Murphy confirmed the planned sale of the Globe and other media properties to Henry. The Times said the all-cash sale, expected to close in 30 to 60 days, includes BostonGlobe.com, Boston.com, The Worcester Telegram & Gazette, Telegram.com, the direct mail marketing company Globe Direct and the company's 49 percent interest in Metro Boston, a free daily newspaper for commuters.
Henry, in a statement published by the Globe, cited the "essential role that its journalists and employees play in Boston, throughout New England, and beyond."
"The Boston Globe's award-winning journalism as well as its rich history and tradition of excellence have established it as one of the most well respected media companies in the country," Henry said.
Henry said he would reveal details about his plans for the Globe in the next few days.
The Times bought the Globe from the family of former Globe executive Stephen Taylor in 1993 for what it said was the highest price paid for an American newspaper. The Globe and other newspapers have faced difficulties in recent years as advertisers have cut spending on newspapers and moved more ads online. Still, the Globe is a journalistic institution in New England and was lauded for its coverage of the April bombings at the Boston Marathon.
A round of cost-cutting in 2009, which involved pay cuts, helped put the newspaper on better financial footing and prompted the Times to call off a planned sale. In late 2011, the Globe started charging for access to its online version at BostonGlobe.com, which helped to boost circulation revenues.
It's hard to see how any newspaper survives the coming decade unless some way is found to better monetize the online product. In effect, the online edition will have to subsidize the dead tree edition, which can't make money because advertisers are spending the dollars elsewhere and expensive union contracts and pension contributions bleed cash.
But who knows? Henry is a savvy businessman and just might make a go of it.
While he's at it, he might tone down the liberal bias a bit and allow for alternate views.
Update from Thomas Lifson:
First of all, because the New York Times company retains liability for the pensions due to Globe staffers, estimated at over $100 million, a sale for 70 million dollars means that the New York Times Company is paying Henry over $30 million to take the Globe off its hands.
Second, the acquisition of the Globe is the responsibility of Pinch Sulzberger, whose tenure as CEO of the New York Times Company has been a catastrophe for shareholders. He has sold off the crown jewels of the empire, including profitable television stations, profitable smaller newspapers, and various other properties such as About.com. The private jet which once ferried family members, exceutives, and even reporters (making them the envy of the profession) is gone. There is nothing left now but the Times itself. Previous generations of the fmaily managed to maintain and even increas the scope of the empire. Under Pinch, it has contrtacted to the point that the entire fortune is dependent on the fate of an operation in a rapidly declining industry.
Howie Carr has a great column, offering what he calls "friendly advice" to John Henry on his new acquisition. For readers not familiar with the Boston journalism scene, Howie works for the Boston Herald, the Globe's feisty tabloid competitor, a paper that no doubt runs on a fraction of the editorial budget of the Globe. The Herald, which used to be owned by News Corp. until it was forced to divest in order to keep its Boston TV station, is conservative and aimed toward Boston's anti-elitists - the working class crowd that has had it up to here with Harvard intellectuals and smarmy Democrats.
Boston exhibits a greater class divide than any other American city, at least among whites. New York may have its extremes of wealth and poverty and its dazzling ethic mix, but for sheer mutual class antagonism among Caucasians, Boston takes the prize. Howie Carr, whose radio talk show is syndicated throughout New England, is the reigning master of mockery of the pretentions of Boston's elites, and he does so with relish on air and in print. The column today, including its picture of Howie is an absolute gem. Readers unfamiliar with the details of local politics might want to use Bing to identify some of the issues and personalities Howie mentions. But everyone understands his final two items of friendly advice:
The first syllable of "newspaper" is "news" - not opinion, especially the predictable moonbat drivel that your new plaything specializes in.
Rampant, serial plagiarism is no longer a workable model for your columnists in this Internet age.