The New York Times (NYT) will not sell the Boston Globe, Boston.com reports.
Arthur Sulzberger, the Times’ chairman says the Globe “has significantly improved its financial footing,” and therefore a sale is no longer necessary.
While it’s certainly possible the Globe is on better financial grounds, it could also be that the Times couldn’t find a high enough bidder.
In August it looked like the highest bidder was offering $35 million in cash, and was willing to take on $59 million in liabilities. That would mean taking a $1 billion bath on the NYT’s Globe investment. It bought the paper for $1.1 billion in 1993.
In June, the Globe was on track to lose $85 million this year. Since then Sulzberger says they’ve been:
- Consolidating printing facilities, expected to save $18 million a year
- Increasing prices on newsstand and home-delivered copies of the Globe
- Reducing compensation for the Globe’s managers and other nonunion employees
- Restructuring the Globe’s labour contracts, which we are projecting will save $20 million in annual operating costs.
The Times may still ditch the Worcester Telegram & Gazette.
Here’s the note he sent to employees:
Note from Arthur Sulzberger and Janet Robinson to all Boston employees on Wed. 10/14 at 5 p.m.
After careful consideration and analysis, we wish to tell you that we have terminated the process to explore the sale of The Boston Globe, Boston.com and related businesses, and they will remain within The New York Times Company.
We continue to assess strategic alternatives for the Worcester Telegram & Gazette, and are determined to reach a conclusion there quickly. We will provide a full update to our colleagues in Worcester as quickly as possible.
We know this has been a long and painful process, and we deeply appreciate the focus and dedication that you have all displayed over the past several months. Janet will be visiting Boston tomorrow for an employee town hall meeting at 11 a.m. She will talk with employees and take your questions.
The Globe has significantly improved its financial footing by following the strategic plan it set out at the beginning of this year. All along, we explicitly recognised that a careful restructuring of the Globe was one possible route and, thanks to your hard work, that is precisely what has been done.
The comprehensive financial strategy you executed incorporated a series of measures to increase revenues and lower costs, including:
• Consolidating printing facilities, expected to save $18 million a year,
• Increasing prices on newsstand and home-delivered copies of the Globe,
• Reducing compensation for the Globe’s managers and other nonunion employees,
• Restructuring the Globe’s labour contracts, which we are projecting will save $20 million in annual operating costs.
The great things you have accomplished both on the financial side and the editorial side of the Globe and Boston.com have solidified their positions as the leading media vehicles in the region. With these strategic steps, the Globe is on track to achieve substantial savings and is on a path to a more secure financial future.
For these initiatives to be successful it was necessary for the Globe’s readers, Boston.com’s users and the greater New England community to continue to embrace our products. They have responded with unwavering support of the Globe, its offerings and you.
We want to take this opportunity to express our gratitude to you for your many significant accomplishments under difficult circumstances. We applaud you for all that you have done and look forward to charting our future together.
Arthur & Janet