After purchasing the Boston Globe in 1993 for a then-record $1.1 billion, the financially troubled New York Times just announced that it sold the 141-year-old paper to Boston Red Sox owner John Henry for a mere $70 million. That’s a straight 93% loss. Figuring in two decades of inflation would only make it worse — as does the fact that the Times retains the Globe’s pension liabilities, estimated at over $100 million.
The Times announced in February that it was putting the Globe up for sale. News reports claimed that bids had been as high as $100 million. What might have sweetened the lower offer for the Times is that Henry offered a straight cash deal, which is expected to close sometime in September or October.
In 2011, the Times turned down a $300 million offer from Aaron Kushner, CEO of Freedom Communications, Inc., publisher of the Orange County Register and other newspapers in California. This offer even included the assumption of pension liabilities, which are currently estimated at $110 million.
The Times itself reports that today’s sale to Henry does not include pension liabilities. Apparently, those remain a Times’ responsibility and expense.
In September of 2002, the Boston Globe enjoyed a circulation rate of 413,000. The average weekday circulation today is nearly half that: 230,351.
Other than plummeting circulation due to online competition, both the Times and Globe have been plagued by collapsing ad revenues that have only worsened in recent years. Friday the Times reported its 11th straight quarter of falling ad revenue.
Both the Globe and Times have and continue to strongly endorse and champion President Obama and his economic policies, even though those policies have failed to create the kind of economic growth necessary to create a boom in advertising spending. The future doesn’t look much brighter.
Last quarter the American economy only grew by 1.7%. Last month saw a mere 162,000 new jobs created, most of them part-time.
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