This week saw the second hearing for David Aptaker for justice of the family and probate court.
What wasn't covered by the media was majority of the subsequent questions asked him by the...
New York Times: Boston Globe no longer for sale
posted by Ralph Ranalli on October 14, 2009
New York Times publisher Arthur Sulzberger and CEO Janet Robinson have sent a note to employees of the Boston Globe, saying that the newspaper is no longer for sale, but that the Worcester Telegram & Gazett remains in play, Boston.com is reporting.
The Sulzberger/Robinson memo cites recent cost-cutting moves, including reductions of union and management salaries and printing plant consolidation as well as new revenues from increased newstand and home-deliver prices, as proof that the Globe "is on a path to a more secure financial future."
Other than that, the memo appears to raise many more questions than it answers. Questions like:
* What happened to the two bids that reportedly came in from the two groups - members of the Taylor family and Platinum Equity - that were attempting to the buy the paper?
* Did the cancellation of the sale have anything to do with the recently-reported increased pension liabilities for the Globe?
* Will the Times Company now launch a Boston regional edition of the New York Times, like the ones it recently unveiled in San Francisco and Chicago?
I have to admit that this one caught me by surprise. I had viewed a Times sale of the Globe as a lead-pipe cinch, and I appear to have been wrong. But then again, that prediction was based on an assumption that the Times would act rationally in its own best interest, which hasn't always been the case either.
Anyway, we'll see what Wall Street thinks of the decision tomorrow.
UPDATE: At 2:21 p.m. Thursday, New York Times shares were essentially unchanged after announcement, down about half of one percent.
Comments
Hi Ralph, Globe Readers, EmilyCheney,
ST: Told You SO
Ref: http://beatthepress.org/blog/ralph-ranalli/523#comments
Ralph, I guess it surprised you, yet you had to do the business math.
Each offer was not worth the property value. In the NEAR future it is far easier for the owners to make even steeper employee cuts and make money.
The biggest problem I foresee is NO Innovation ideas to generate revenue thus being able to increase expenses. Cost cutting alone as a solution is a sign of dead idea top management.
Edit-01: Had to correct confusing sentences and split some sentences
MrDave,
I hear you, particularly about the dearth of good ideas on the revenue side being a bad sign.
But when you're talking about this decision, you also have to figure in ongoing losses and the depreciating value of the asset. Is the Globe still losing money? I don't know, but you'll notice that Sulzberger and Robinson's memo didn't say the Globe is now making money or breaking even, just that it is "on a path to a more secure financial future."
To me, this is the Times betting on an economic recovery and hoping that in the short term the Globe appreciates more in value than it loses. I hope they're right, but J.P. Morgan is already estimating that ad revenue at the New York Times Co. will be down another 27 percent in the 3rd quarter of this year. And if the value of the paper does go up, who are the buyers going to be? The current sale attracted a non-profit bid (Connors/Pagliuca), a bargain hunter (Platinum) and a civic pride/nostalgia bid (the Taylors) that reportedly had a hard time raising even the current low price. And even if everything goes right and the Times eventually sells the Globe for, say, $100 million instead of $35 million, they'll still take a $1 billion loss on the original 1993 sale. If it had been my decision, I would have gotten out now and re-focused the company's energy on its core asset. That's why it's called "cutting your losses."
I agree with you, Ralph. This decision is . . . schizophrenic at best. I suspect they'll regret it.