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New York Times calls off sale of Boston Globe
Source: Agencies |
October 15, 2009, Thursday
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THE Boston Globe is off the market.
The New York Times Co. said yesterday it won't sell the newspaper after all, following "careful consideration and analysis."
In a regulatory filing, the company said it was still weighing its options for its other major New England property, the Telegram & Gazette in Worcester, Massachussets.
In a memo sent to Globe employees late Wednesday, Times Co. Chairman Arthur Sulzberger Jr. and CEO Janet Robinson acknowledged the "long and painful process" that led to the decision to keep the paper.
"The Globe has significantly improved its financial footing by following the strategic plan it set out at the beginning of this year," Sulzberger and Robinson wrote. "All along, we explicitly recognized that a careful restructuring of the Globe was one possible route and, thanks to your hard work, that is precisely what has been done."
The memo alluded to a series of steps taken by the newspaper, including a restructuring of labor contracts that is projected to save US$20 million on an annual basis, consolidation of printing facilities and price increases for both newsstand and home delivery.
The Globe is also exploring ways to charge for online content on its Web site, Boston.com.
"The great things you have accomplished both on the financial side and the editorial side of the Globe and Boston.com have solidified their positions as the leading media vehicles in the region."
Rick Edmonds, a media business analyst for St. Petersburg, Florida-based Poynter Institute, a nonprofit school for journalists, said he was not surprised by the fact the Globe has been withdrawn from the market.
"I have thought since early in the year this might not be the right time to sell the Globe ... because the industry is doing so badly, very few people are in a position to offer good prices for newspapers," he said.
The Times Co. disclosed in August that it had retained Goldman, Sachs & Co. to explore a potential sale of its New England Media Group, which includes both newspapers. Company executives later told Globe employees that the newspaper's finances had improved significantly and that a sale was no certainty.
The Globe, citing anonymous sources, reported that two groups made preliminary bids and visited the newspaper's headquarters in September.
One group was led by Stephen Taylor, a member of the family that sold the newspaper for US$1.1 billion to The New York Times Co. in 1993. The other was Platinum Equity, a private equity investment firm which purchased The San Diego Union-Tribune in May.
Neither group had publicly discussed their interest in the Globe.
A spokesman for Beverly Hills, California-based Platinum Equity declined comment, saying the company does not discuss prospective acquisitions. Taylor did not immediately return a call seeking comment Wednesday.
Scott Allen, a Globe reporter, said while some staffers might have hoped for a sale during the painful labor negotiations, it became evident as the newspaper's financial situation improved that the Times Co. might well remain as owners.
"It's good that this process is over, it's good that we can start planning for the future again, but we don't want the New York Times to forget how much we sacrificed to turn the Boston Globe around and they need to acknowledge that in deeds and not just in words," said Allen.
Robinson was scheduled to hold an "employee town hall meeting" in Boston on Thursday.
The Times Co. had said the Globe's operations were on track to lose US$85 million this year before unionized workers agreed to concessions.
The New York Times Co. said yesterday it won't sell the newspaper after all, following "careful consideration and analysis."
In a regulatory filing, the company said it was still weighing its options for its other major New England property, the Telegram & Gazette in Worcester, Massachussets.
In a memo sent to Globe employees late Wednesday, Times Co. Chairman Arthur Sulzberger Jr. and CEO Janet Robinson acknowledged the "long and painful process" that led to the decision to keep the paper.
"The Globe has significantly improved its financial footing by following the strategic plan it set out at the beginning of this year," Sulzberger and Robinson wrote. "All along, we explicitly recognized that a careful restructuring of the Globe was one possible route and, thanks to your hard work, that is precisely what has been done."
The memo alluded to a series of steps taken by the newspaper, including a restructuring of labor contracts that is projected to save US$20 million on an annual basis, consolidation of printing facilities and price increases for both newsstand and home delivery.
The Globe is also exploring ways to charge for online content on its Web site, Boston.com.
"The great things you have accomplished both on the financial side and the editorial side of the Globe and Boston.com have solidified their positions as the leading media vehicles in the region."
Rick Edmonds, a media business analyst for St. Petersburg, Florida-based Poynter Institute, a nonprofit school for journalists, said he was not surprised by the fact the Globe has been withdrawn from the market.
"I have thought since early in the year this might not be the right time to sell the Globe ... because the industry is doing so badly, very few people are in a position to offer good prices for newspapers," he said.
The Times Co. disclosed in August that it had retained Goldman, Sachs & Co. to explore a potential sale of its New England Media Group, which includes both newspapers. Company executives later told Globe employees that the newspaper's finances had improved significantly and that a sale was no certainty.
The Globe, citing anonymous sources, reported that two groups made preliminary bids and visited the newspaper's headquarters in September.
One group was led by Stephen Taylor, a member of the family that sold the newspaper for US$1.1 billion to The New York Times Co. in 1993. The other was Platinum Equity, a private equity investment firm which purchased The San Diego Union-Tribune in May.
Neither group had publicly discussed their interest in the Globe.
A spokesman for Beverly Hills, California-based Platinum Equity declined comment, saying the company does not discuss prospective acquisitions. Taylor did not immediately return a call seeking comment Wednesday.
Scott Allen, a Globe reporter, said while some staffers might have hoped for a sale during the painful labor negotiations, it became evident as the newspaper's financial situation improved that the Times Co. might well remain as owners.
"It's good that this process is over, it's good that we can start planning for the future again, but we don't want the New York Times to forget how much we sacrificed to turn the Boston Globe around and they need to acknowledge that in deeds and not just in words," said Allen.
Robinson was scheduled to hold an "employee town hall meeting" in Boston on Thursday.
The Times Co. had said the Globe's operations were on track to lose US$85 million this year before unionized workers agreed to concessions.
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