Analysis: Times Wants ‘Clean’ Globe For Sale

BOSTON — Even as the Globe’s management and workers negotiate contract concessions, The New York Times Co. is reportedly looking to sell the Globe. The Times Co. purchased the 137-year-old broadsheet in 1993 for $1.1 billion and is now projecting an operating loss of $85 million this year.

To consider the paper’s value and to talk about some potential buyers, we turned to WBUR Senior Media Analyst John Carroll.

Bob Oakes: Why is it in the interest of management and the union to settle their differences as soon as possible?

John Carroll: The cleaner it is for a new owner, the better it is, and the easier time The Times is going to have selling the paper.

What’s your guess about the impact of this current flap on the value of the Globe?

I think that the Globe in general is worth a fraction of what The Times paid for it. What they need to do is to try to get out with as few liabilities on their books as they possibly can.

There was an interesting piece in the Times Monday by David Carr, basically looking at the value of the Globe and how people estimate in the industry — how media analysts estimate — the value of the Globe. And it’s anywhere from $250 million to The Times would have to pay somebody $25 million to take it off their hands. So, there’s a wide range of possibilities out there. I think the cleaner it can be for The Times when they offer it up to an owner, the better it’s going to be.

I just was stunned by that one financial analyst’s view that, this $1.1 billion paper — that’s what The Times paid for it years ago — The Times might have to pay someone to take the paper off its hands, just to get the Globe losses of the Times’ books.

Yeah, there’ve been a lot of stories out there. There was one story that The Times Co. was looking to sell its interest in the Boston Red Sox, and the Globe was going to be sort of a gift with purchase. I don’t think it’s quite that bad. Most estimates are around $100, $125 million. I think somewhere in between is probably where it’s going to go. But it’s hard to know how large their financial liabilities are.

I want to ask about some of the names being floated locally as potential buyers. Most prominently the local-based trio: former Boston ad executive Jack Connors; Stephen Pagliuca of Bain Capital, a Boston Celtics co-owner; and Stephen Taylor, whose family owned the Globe for generations before they sold it to the Times. How likely is it the team will actually step forward and make an offer? Does it sound like a good team and what do you think they’d bring to the Globe?

Well, I don’t know how likely it is they would step forward. I mean, Jack Connors is going to file this one under, “sometimes the best deals you make are the deals you don’t make.” Because he and Jack Welch and some other investors — potential investors — offered somewhere north of  $500 million for the paper a couple years ago. So now, if they could get it for $100 million, that would be a pretty sweet deal.

I don’t know how likely it is. I mean, I think that the issue would be, can they see some value going forward? The Philadelphia Inquirer is a very interesting sort of cautionary tale for local ownership. Three years ago, local ad entrepreneur Brian Tierney steps in, he buys the Philadelphia Inquirer, everybody thinks he saved the day. You have the local white knight, everything’s going to be fine. The first thing he does is he goes in and he slashes the newsroom. Now he’s in bankruptcy.

The financial constraints on newspapers are going to face any owner — local, public stock ownership, whatever it may be. Any conglomerate that buys it, any individual that buys it is going to have to deal with the same financial situation. So it’s not a silver bullet to have local ownership. That said, it would be probably a step up, because there would at least be some sense of a connection with the community, something that The Times does not have.

Let me ask about the Globe’s main union, the Boston Newspaper Guild, which itself has expressed an interest in finding a buyer and negotiating for a stake in new ownership. Where does a possible sale put that union?

One way or the other, they’re going to have to deal with a new owner. And the new owner is going to come in and going to do the same kinds of things that The Times would be doing and The Times is trying to do now. I mean they have no choice. So the guild is going to be in a disadvantaged position either way, and I think that the concessions they’re going to make are only starting to happen. I think the cuts are going to be much deeper than they’re anticipating even now.

We spoke recently with the president of the newspaper guild in Portland, ME, at the Portland Press Herald, which took a leadership role in trying to find a new buyer for their paper, and they did find a new buyer. But not all is rosy in that partnership, because as many as 100 jobs are going to be lost out of the 500 at the paper, and the guild itself is anticipating wage cuts. Do you think it’s likely that the Boston guild will be out there trying to beat the bushes for a buyer?

All due respect to the guild, if their negotiating in this situation is any indication of their management skills, I would advise them to stay well clear of this new ownership. I just think that probably the best thing that they could do is look out for their own interest and let The Times deal with the sale themselves.