The New York Times Company plans to sell The Boston Globe and other New England properties, allowing the media company to focus energy and resources on its flagship newspaper.
The Times Company announced on Wednesday that it had retained Evercore Partners to manage the sale of the New England Media Group, anchored by The Globe, Boston.com, The Worcester Telegram Gazette and Globe Direct, a direct-mail marketing company.
Mark Thompson, president and chief executive of the Times Company, described The Globe and The Telegram Gazette as “outstanding newspapers.” In a statement, he said selling the newspapers “demonstrates our commitment to concentrate our strategic focus and investment on The New York Times brand and its journalism.”
The Times Company paid $1.1 billion for The Globe in 1993, and for years the Boston daily brought prestige and profits to the company. But recently the newspaper has suffered in an industrywide decline in circulation and advertising revenue.
The paper’s circulation has diminished by nearly half in the last decade. Monday to Friday circulation fell from 438,621 in 2002 to 230,351 in September 2012. The September figure is a slight improvement from the 205,939 weekday circulation in September 2011, according to the Alliance for Audited Media.
The Times Company is expected to seek a buyer in an auction, but in a news release said “there can be no assurance that any transaction will take place.”
Suitors have approached the Times Company about buying The Globe in the past. In 2009, after the company said The Globe was on track to lose $85 million, Arthur Sulzberger Jr., chairman of the Times Company, turned down one bid of around $35 million and the assumption of pension obligations for The Globe and The Telegram Gazette.
One group of interested investors included Stephen E. Taylor, whose family had owned The Globe and sold the paper to The Times. Mr. Sulzberger later said The Globe’s finances had turned around and the offers were too low.
The Times Company has in recent years sold assets unrelated to The Times. In September, IAC/InterActiveCorp paid $300 million for the About Group, which includes About.com and CalorieCount.com. In May, the Times Company received $63 million for its remaining stake in the Fenway Sports Group, the company that owns the Boston Red Sox. Last year, the company sold its 16 regional newspapers, including The Gainesville Sun and The Sarasota Herald Tribune, to Halifax Media Holdings for $143 million.
Alexia S. Quadrani, an analyst at JPMorgan Chase, said that the sale is welcome news for investors because it lets the Times Company focus on its core business and raises the possibility that investors may receive a dividend.
“It helps The New York Times in the sense that they’ve had some good successes with the core products,” Ms. Quadrani said. “The fact that circulation at the core New York Times outweighs advertising revenue is a good thing.”
Times Company shares closed down 0.4 percent to $9.03 on Wednesday, down from a 52-week high of $11.07 in October.
Globe management has for the last several years tried to shepherd a diminished newsroom into a digital future, efforts that have showed signs of success. According to the Times Company, digital subscriptions to The Globe and BostonGlobe.com grew to about 28,000 subscribers in the fourth quarter of 2012, an 8 percent increase from the end of September.
The paper has tried other creative means to make up for diminished advertising and circulation revenue. After The Globe’s longtime editor, Martin Baron, departed in December to run The Washington Post, the Globe’s publisher, Christopher Mayer, hired the popular metro columnist Brian McGrory to replace him. And as The Globe’s need for newsroom space shrank, Mr. Mayer tried to welcome new partners in the digital world by offering office space to technology start-up companies that could work with The Globe on investigative articles and ventures like The Boston Globe’s travel show.
“Our business continues to change in many ways,” Mr. Mayer said, “and this process may certainly lead to a significant one, but what isn’t changing is our commitment to our mission and our strategy of informing, entertaining and engaging our readers.”
John Janedis, a research analyst with UBS, said the announcement on Wednesday raised questions about how much or how little the Times Company would receive for The Globe today. He estimated that the paper was worth $150 million to $175 million, purely on a cash-flow basis without factoring in pension liabilities.
“Do they sell it at any price to allow them to focus solely on the flagship New York Times platform, which has a much higher probability of success?” Mr. Janedis said.
Reporters and editors described the mood in The Globe’s newsroom as filled with nervous anticipation. Scott Allen, senior assistant metro editor, recalled the anxieties he and his colleagues felt back in 2009. Back then, he said, the Times Company’s former chief executive, Janet L. Robinson, visited The Globe and assured staff members that there would not be a sale.
“It makes us a little nervous,” Mr. Allen said. “We’ve been through this before. It’s not like these are wildly profitable enterprises,” he added, referring to newspapers. “There’s a feeling inside this building that we’ve worked hard to reinvent ourselves. Hopefully this is a very different time than 2009 and 2010. It certainly brings back memories that are not happy ones.”
Article source: http://mediadecoder.blogs.nytimes.com/2013/02/20/new-york-times-company-plans-to-sell-the-boston-globe/?partner=rss&emc=rss
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