Times Co. plans to sell the Globe after 20 years
The New York Times Co. on Wednesday said it plans to sell the New England Media Group, including The Boston Globe and its related online properties, and has hired an investment banker to find a buyer.
The move comes more than three years after the Times Co. tried unsuccessfully to sell the Globe amid the recession and mounting losses at New England’s largest newspaper. Now, after a significant turnaround at the Globe and its online sites, BostonGlobe.com and Boston.com, the Times Co. is seeking to shed its last major outside holding.
“Our plan to sell the New England Media Group demonstrates our commitment to concentrate our strategic focus and investment on The New York Times brand and its journalism,” said Mark Thompson, chief executive of the Times Co., in a statement. The Times Co. has owned the Globe for two decades.
Thompson said the Times Co. was “proud of our association with the Globe” and Worcester Telegram & Gazette, but “given the differences between these businesses and The New York Times, we believe that a sale is in the best long-term interests of these properties and the employees who work for them as well as in the best interests of our shareholders.”
Shares of the Times Co. fell slightly on the news, which broke just before the market’s close. The stock closed at $9.03, down 4 cents.
The Times Co. has hired Evercore Group, a New York investment banking firm, to help solicit bids for the Globe. Evercore has been involved in recent deals to sell other news publications, including the San Diego Union-Tribune, BusinessWeek, Newsweek, and Variety.
The Globe’s publisher, Christopher Mayer, said the sale process would likely take several months.
“Our business continues to change in many ways, and this process may certainly lead to a significant one,’’ Mayer said. “But what isn’t changing is our commitment to our mission and our strategy of informing, entertaining, and engaging our readers with an ever expanding variety of reading options, while we provide effective ways for advertisers to reach their targeted audiences.”
The Times Co. last tried to sell the Globe in 2009, after first threatening to shut the newspaper down because it was losing money. Following wage cuts and other cost-saving concessions from Globe employees, the Times Co. decided not to sell at that time, saying the bids it received from two business groups were lower than anticipated.
News of the intended sale is sure to spark a new round of speculation and uncertainty at the newspaper, which has withstood — better than many other metropolitan dailies — the challenges of more readers shifting to the Internet and a protracted drop in advertising revenues.
“The Globe, like a Chicago Tribune or LA Times, is potentially attractive to a well-to-do individual or group of folks who want to do something good for the city and aren’t necessarily interested in turning a profit right away,” said Rick Edmonds, a media business analyst with the Poynter Institute, a journalism organization based in Florida. “It remains an excellent and ambitious paper on the news side.”
Edmonds said few media companies are in expansion mode, and even a smaller subset would be interested in acquiring a metro newspaper. Larger chains such as Gannett Co. are reducing their newspaper holdings, he noted, making it more likely a buyer would emerge from the Boston area.
In 2009, several local business people initially emerged as potential bidders, including retired advertising mogul Jack Connors; Bain Capital partner Steve Pagliuca; and a group led by Steve Taylor, a member of the family that formerly owned the Globe. The two final bids submitted came from Taylor’s group and from Platinum Equity, a Beverly Hills private equity firm that bought the San Diego Union-Tribune. Neither bid was successful. The first three parties declined to comment Wednesday on the new sales announcement; Platinum could not be reached.
Nearly two years after the 2009 sale attempt, Aaron Kushner, a Wellesley businessman, expressed interest in buying the Globe. Kushner instead went on to buy the Orange County Register and other papers owned by Freedom Communications Inc. in Irvine, Calif., after failing in an attempt to acquire the Portland Press Herald in Maine. He, too, was not available for comment Wednesday.
In addition, other executives have been part of groups considering buying the Globe. They include Richard Daniels, a former Globe executive, and Heb Ryan, who runs the private equity firm Boston Post Partners. Neither could be reached for comment.
Some newspaper industry executives said Rupert Murdoch — head of News Corp., which owns Fox News, The Wall Street Journal, and the New York Post — should not be ruled out as a serious suitor. Murdoch also owns the Ottaway group of community papers that include the Cape Cod Times and the Standard-Times of New Bedford. Murdoch used to own the Boston Herald. Nathaniel Brown, a spokesman for News Corp., declined to comment.
The Times Co. bought the Globe in 1993 for $1.1 billion, in what was then a record transaction in the news business. Within little more than a decade, however, the Internet began to erode newspaper revenues and subscriptions as more readers read news for free online, dramatically altering the landscape of the business.
Today, the Globe’s parent is likely to make a fraction of what it once paid to acquire the then-family-owned Globe, controlled by the Taylors for 100 years.
Bids submitted to the Times Co. in 2009 were low, about $35 million on top of taking on the Globe’s pension liabilities, which range from $100 million to $200 million. This time, the Times Co. is considering keeping the Globe’s pension liabilities so it can fetch a better price, according to people briefed on the matter but not authorized to discuss it publicly.
Since the aborted 2009 sale attempt, the Times Co. has sold virtually all of its non-New York assets, including newspapers in Florida and California, broadcast outlets, and the website About.com. It also sold a lucrative stake in the Boston Red Sox, tripling a $75 million investment over 10 years.
In addition to the Globe and Worcester Telegram, the current sale plan includes BostonGlobe.com, Boston.com, Telegram.com, and the Globe’s direct mail marketing company, GlobeDirect. It also would include the company’s 49 percent stake in Metro Boston.
The Globe has a print circulation of 372,541 on Sunday, and 230,351 daily. BostonGlobe.com, a paid site started in late 2011, had about 28,000 subscribers as of the end of last year.
The Globe and its online businesses, BostonGlobe.com and Boston.com, showed an operating profit in 2012, according to people briefed on the financial results, although after various accounting charges and other items there was a net loss. Those people spoke on condition of anonymity because they were not authorized to discuss the results publicly. The Globe and its businesses also were profitable in 2011.
The Times Co. declined to comment further on its plans to sell the Globe and the other properties.