The Boston Globe will lose $85 million this year. The Boston Globe writers guild, meanwhile, refuses to let the New York Times reduce its annual costs by $10 million. (The paper’s other unions have already agreed to $10 million in cuts).
So what’s the New York Times to do?
Well, it could shut the Globe down. But that would probably cost $100+ million in severance, lease-termination, and other closure costs. The NYT keeps threatening to do this, but we suspect this is just part of a big game of chicken.
The NYT could also slap the guild with a 23% pay cut based on the failure of good-faith negotiations, which seems to be where it is headed (the union is disputing that the negotiations failed).
Or it could just find some sucker to take the paper and its problems off the company’s hands.
Apparently, the NYT is now exploring the latter option. Anyone want to buy the Boston Globe?*
AP: The Boston Globe is reporting that its owner The New York Times Co. has hired Goldman Sachs to manage the possible sale of the financially struggling newspaper.
The Globe, citing two potential buyers who wished to remain anonymous, reported Wednesday that Goldman Sachs has begun accepting bids for the 137-year-old newspaper. That was before the Boston Newspaper Guild, the Globe’s largest union, voted Monday to reject $10 million in pay and benefit cuts demanded by the company.
The company responded by saying it would cut pay by 23 per cent. Keep reading >
Here’s the Boston Globe on the issue:
The Times Co., which has declined to comment in recent months on whether it is selling the Globe, has hired Goldman Sachs, the same Wall Street investment bank the Times Co. has hired to sell its 17.5 per cent stake in the Boston Red Sox, the potential bidders say.
In recent weeks, Goldman Sachs representatives have told interested parties that the Times Co. would begin accepting bids for the Globe after June 8, no matter which way the Boston Newspaper Guild, the Globe’s largest union, voted on $10 million in pay and benefit cuts demanded by the company.
“The New York Times has indicated to interested buyers that once the June 8 vote had taken place, once everybody knew what was going to happen — up or down — they would expect bids a couple weeks later,” said one of the interested buyers. Both requested anonymity because they are not ready to speak publicly about the potential sale.
“That doesn’t mean they have said they are going to sell it. They’ve just said they are willing to entertain bids. But it sure indicates an interest,” said one potential bidder.
This same person said bids would be taken on “any and all” New England properties, including the Globe and the Worcester Telegram & Gazette. The other potential buyer added that the process may take some time, with the Times Co. “exploring options over the summer.”
*For what it’s worth, we’d be glad to buy the Globe. It’s a great franchise, and there’s a lot of value there. But we’d need some major union concessions before we did so. For example, we wouldn’t be looking to cut $20 million of costs off the $85 million burn rate. We’d be looking to cut at least $100 million of costs (we don’t groove on the whole perpetual money-burning thing.) So if the unions are cool with that, we’d be glad to submit a bid.
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