Boston Globe Sold by New York Times at Massive Loss
The Boston Globe newspaper has been sold by its owner, the New York Times Company, for $70 million in cash to investor John W. Henry. Included in the deal were the Times’s stakes in two other smaller papers, the Worcester Telegram & Gazette and Metro Boston, a free tabloid.
The Times had purchased the Globe company in 1993 for $1.1 billion. Adjusted for inflation, the New England Media Group operation sold for just under 4 percent of the original sale price. The all-cash deal did not include an assumption of the company’s pension debts of about $110 million which will remain with the Times Company.
According to published reports, there were a few people interested in purchasing the Globe including ex-Time Inc. CEO Jack Griffin, in partnership with cousins Steven and Ben Taylor, whose family once owned the newspaper. Two right-leaning mainstream media moguls, Douglas F. Manchester, owner of the U-T San Diego (formerly the San Diego Union Tribune) and Aaron Kushner, publisher of the Orange County Register had also expressed interest.
According to Businessweek, Kushner offered more than $300 million for the Globe in 2011 but was rejected since he did not include enough up-front cash.
That is at least the ostensible reason. In light of the fact that Kushner is said to lean conservative, it is worth recalling the situation with Newsweek, another left-leaning media property which put itself up for sale in 2010 but refused to entertain offers from Newsmax Media due to its “conservative political ideology.”
Ultimately, Newsweek was sold for $1 and the assumption of at least $50 million in liabilities to Sidney Harman, liberal businessman who was married to former Democratic congresswoman Jane Harman. He died in 2011 but before that, he succeeded in combining Newsweek’s operations with the website Daily Beast.
The Henry deal is actually the second one he has done with the Times Company. He purchased the media corporation's stakes in the Boston Red Sox last year.
Some additional info from the Times on the declining state of the Globe's financials:
Like most newspapers, The Globe has struggled to hold onto its readers and the print advertisers who fed its profits for decades. According to the Alliance for Audited Media, circulation at The Globe from Monday through Friday declined 38 percent in 2013 from 2003, to 245,572 from 402,423. Before the Times Company bought The Globe in 1993, The Globe had a weekday circulation of 506,996.
As circulation declined, so did advertising. According to the second-quarter earnings statement released by the Times Company on Thursday, advertising revenue for the New England Media Group dropped 9.5 percent, to $44.4 million, compared with the same quarter in 2012.