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The Boston Globe is raising its newsstand prices as executives at the paper look for ways to deal with growing losses. Starting next month, a copy of the Globe will cost 25 cents more during the week. The Sunday Globe will be a dollar more in Greater Boston, and $1.50 more further out.
The paper says the cost increase is "necessary under current economic conditions." The increase is part of a broader management plan to return the Globe to solvency — or possibly position it for sale.
Call it burying the lead. The editor of the Boston Globe, Marty Baron, gave a speech to Oregon journalism students last week on the "shrinking newsroom." And he told of the sad decision two years ago to close the Globe's foreign bureaus. The paper had to do it, he said, to keep its local news coverage strong.
MARTY BARON: Today, that decision over foreign bureaus looks easy. The decisions we are making today, as money becomes more painfully tight, are harder. They cut closer to the bone, threaten to remove muscle.
Jump to Boston, where the same day of that talk the New York Times Company delivered an ultimatum to Globe unions, demanding $20 million in concessions by the end of the month or else see the paper shut down.
BOB GILES: I would be stunned if the paper actually closed.
Bob Giles heads Nieman Foundation for Journalism at Harvard. He says the Times' threat is a typical bargaining tactic nowadays. It has worked recently at other newspapers. Employees agreed to give up some pay and benefits, conceding that the industry has been shredded by declining ad and subscription revenue.
The balance sheet for the Globe is not public, but some reports have its losses running as high as $7 million a month. Lou Ureneck heads the journalism department at Boston University. He says with the New York Times having its own problems making ends meet, the last thing the parent company wants to do is subsidize the Boston broadsheet.
LOU URENECK: I think it's trying to make the situation manageable. In the short term. The New York Times would sell the Globe in a heartbeat if it had the opportunity, if it had the right buyer.
Assuming there is even a buyer, what is the Globe even worth? Generally, newspapers have been valued at a factor of their operating margin. A few years ago, a paper with a $50 million-dollar-a-year profit would sell for about six times that.
But that going rate flies out the window when newspapers are losing money. And don't forget that the New York Times bought the Globe 15 years ago for more than $1 billion. Newspaper industry analyst John Morton says the Globe is probably worth maybe a quarter of that now. Still, he doesn't think the Times will want to sell.
JOHN MORTON: I doubt whether the New York Times is eager to try to get out of their situation here. I think they want to improve it, and that's what they're trying to do.
After all, he says, the Boston Globe still brings in hundreds of millions of dollars. It just spends more than it makes. The higher newsstand prices set to take effect May 4 could help the paper break even. So would concessions from the unions. They start talks with management last night. In his speech last week, Globe editor Marty Baron said the situation is still very fluid.
BARON: We do not know long-term, or really even short-term, what our actual financial resources will be.
So don't expect these latest financial measures to be the end of it.
This program aired on April 8, 2009. The audio for this program is not available.
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