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New York Times Sells Boston Globe At 93% Loss
An anonymous reader writes "The New York Times announced this morning that it has sold the Boston Globe newspaper and related assets, including the Boston.com website and the Worcester Telegram & Gazette daily paper, to John Henry, the principal owner of the Boston Red Sox. The price was $70 million in cash, a small fraction of the $1.1 billion the Times paid to acquire the Globe in 1993, and does not include assumption of the Globe's pension liabilities, estimated at $110 million, which will remain with the Times. Since then the paper's weekday circulation has fallen from 507,000 to 246,000 (including digital), mirroring the declining fortunes of many other daily newspapers across the country. Henry, who also owns the Liverpool FC and various other sports- and media- related properties, made his fortune in the investment industry; however, his hedge fund company recently closed after several years of poor performance."
Seriously. What information do they have that is at all useful? In the old days we had muckrakers telling us all the awful things our politicians were doing. These days since they're all owned by big corps they don't want to step on any toes. After all, you won't last long if you say bad things about the boss. It feels like all they have left is sports news I can get from the source, some 30 year old comics and classifieds full of H1-B bait :(.
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I'm curious how much more of a loss it would be if you calculated inflation. $70 million would purchase a lot more in 1993 then it would today.
What was $70,000,000 in 2012 was $44,337,914.10 in 1993. Going the other way, if the NYT had sold the Globe immediately after purchase and made $70M in 1993 dollars, that'd be what we think of as about $103 million today.
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...why did I type 103. It's $109,549,232.63. Source.
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When your entire news slant is to the extreme left you tend to alienate anyone who is on the right, anyone who is centrist or moderate, and anyone who is center-left. You end up with an audience that is composed of one single viewpoint politically. An extreme viewpoint at that. The NYTimes, another extreme left paper, had control over the Globe and ran it into the ground. Everyone saw this coming.
Of course you're looking at a 93% loss of value. You're only talking to less than 10% of the population. What was once a newspaper that examined all of society with a fair eye it now only caters to a small minority of zealots. There was no investigative journalism at all. No honesty or insight to anyone with a (D) next to their name. Just nonstop bias and pandering to a single narrow viewpoint. Of course you're dooming your paper to obscurity.
I know that bashing Fox News is a popular opinion. But of the mainstream papers, websites, and news TV stations, it's actually rather moderate. The panels and editorials are filled with a strong selection of liberals, conservatives, and moderates. And the ratings reflect that because Fox News national brings in the viewers. You're just as likely to find a liberal view on a panel segment as you are a conservative one. And the conservative commentators don't hide their bias. Whereas the Boston Globe would pretend that it was 'progressive' and refuse to at all accept the reality that it was practically a propaganda newspaper for liberal Democratic operatives. Fox News gets its ratings because there are enough liberals and moderates to attract a broad audience.
They can blame it on the internet. On the economy. On low advertising revenue. But a newspaper is supposed to objectively report the news. And stand as the Fourth Estate against political corruption. They are not supposed to maintain the political status quo and effectively serve as a PR firm for politicians. The Globe was failure all over.
Ultimately this is a win for John Henry. He'll spend $75 million on a busted arm for a pitcher that gives him no return for the Red Sox. But $70 million is almost worth it alone for some of the Boston Globe's web domains that it owns. Now John Henry (who is a major Democratic Party donator, in the millions) has a liberal PR institution to output his views. He has the ability to shut down all negative conversation about the Red Sox from current Globe employees. And he can use the Globe and Boston.com to heavily market Red Sox tickets and jerseys. This will pay for itself within a few years with the boost to Red Sox branding.
Look at who is buying newspapers now. Extreme right and left wing political donators. As if newspapers aren't PR machines for the politicians enough. Now they are literally being run by GOP and DNC donors.
If you trust something a company promises to do for you decades in the future, you're a fool.
Pensions have been a collosal ponzi scheme, and are about to collapse.
There needs to be an immediate lawsuit to take all money from the primary sale and put it to the debt, and the primary debt is the workers/pensions.
Nope. The primary debt is lenders with collateral. There's a queue of creditors who have claim on the debt of a failed business which enters bankruptcy. Pensioners are towards the front, but there are parties ahead of them.
I don't know who that man is, but he can't possibly be John Henry! Everybody knows that John Henry was a steel-driving man!
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It gets worse... they sold it for -40 million (price minus leftover pensions), but they rejected an offer to buy it a couple of years ago for 300 million (410 million including pensions in that deal) . Apparently they're great at losing money on an investment rapidly....
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
their site is home to the Big Picture, a blog with photographs from around the world regarding various events, celebrations etc..it gets updated with a new entry every couple of days, totally worth the time if you have an interest in photography
Most blogs are opinions about news, not news in and of itself. A few insider blogs might drum out some news, but the vast majority of them do no such thing.
I don't envy fools, but I do wish we'd move beyond victim blaming and focus on predator jailing. Companies get away with far too much shit.
Has the Koch brothers' political stances hurt their bottom line?
Table-ized A.I.
That means if the newspaper had been sold at that price including its liabilities, the buyer should have received $40 million. Woah.
While I don't read the NYT (wrong side of the world) I have to point out that anyone calling a mainstream media outlook "extreme" is better off looking at where their own views lie instead of putting labels on something else.
I've heard a newspaper described as commie and fascist in the space of two minutes depending on who was doing the name calling. Your post reminds me of the utter losers doing the name calling and detracts from whatever worth you may have yourself so I just cannot take you seriously.
One thing I would like to see on paper web sites which would make me more likely to subscribe to their physical counterparts is a "suppress syndicated content" checkbox that would let me see how much actual journalism they themselves are engaged in, before I invite their paper in to clutter up my living room. I'll warn you right now, though, if that gets rid of 95% of your content, you aren't going to darken my door.
I also already get enough coupons and advertising from the direct marketing association, so it'd be nice if they didn't put ads everywhere in the paper copy of the newspaper, since the postman already brings me all the coupons and local advertising I could ever want to recycle. One of the most annoying things the San Mateo Times does periodically is "give you" a "free" copy of their Wednesday or Sunday "supertacular advertising issue" so they can claim high circulation numbers, right before the end of the circulation reporting cycle. 600 pages of crap and 20 pages of content, and 80% of those are Reuters, UPI, or AP stories.
Finally, I think color is vastly overrated; save it for "fashion week" or other special purpose spreads that get delivered in special sections, and the Sunday comics. I don't get where everyone believes the way to sell physical papers is to look as much like "USA Today" as it's possible to look, without actually putting "USA Today" on the banner. Maybe they get a higher per unit marginal profit or something, like when you go to a restaurant, and they serve you 3X the food you should be eating so they can jack up the price, and the marginal profit per hour, to maximize their profit relative to their flooring costs...
You are, basically, saying that the New York Times is poorly managed.
It seems to me that newspapers are losing money because of poor management, not only because of loss of advertising to the internet.
To me, the New York Times seems like it is managed by people who don't have much understanding of the technical or sociological issues.
The Koch brothers do not use their businesses to promote their political agenda. They have set up other organizations through which to spend their money promoting their political agenda. As such they have done exactly as the OP recommended.
The truth is that all men having power ought to be mistrusted. James Madison
After saying how much they respected and admired the Globe, the New York Times made it clear that they regarded Boston as the sticks and just wanted to milk the cash cow.
I was a subscriber for decades and might still be if they had basically not driven me away.
They gradually cut out all my favorite columnists and started to use wire services for national stories they would once have covered themselves.
Royal Ford, their auto writer, always talked about things like how the tested car did during a snowy ski trip to New Hampshire. So one day I open the paper to find that he's been replaced by a syndicated column written by someone in California.
The last straw was billing. They screwed up the billing. We were on quarterly billing, and when the New York Times took over, we continued to receive quarterly bills--but EVERY bill we got was accompanied with a 90-day late notice and threats to send it to collection.
We got that straightened out--went to automatic monthly payments by credit card--and THEN someone at the Globe decided it would be cool to wrap all of their newspaper bundles in computer printouts of customer credit card information.
My wife says to me, "Well, I hate the work of mailing a check every month, but should we do that?" And I say "Honey, didn't you read the rest of the story? They wrapped the Globe in credit card printouts, but they were wrapping the Worcester Telegram in customer checking account information printouts!
What can you say to a company that does a thing like that? Except "goodbye."
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Huh? The Times owns the pension obligations and is less likely to go bankrupt than the new business ... it would have been far more shifty if the Globe had been sold to some shell company including the pension obligations.
Depends a bit on the value of the collateral, if the collateral only covers a small part of the debt then the secured lenders can still be off far worse than the senior ones.
Doesn't matter. The NEW method for running taken over papers is; pile in more local stories, purchase the most lurid news service stories, make half or more of the print ads, ride till the profits disappear, then sell off the assets and bury it 6 ft. under.
Silly rabbit, everyone gets their news off the internet now anyway.
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He doesn't care. He just had to throw that name into the picture because he had no legitimate response that wasn't leftist hatred for Fox News.
If you think I voted for Trump because of this post, you're wrong. I voted for Dr. Jill Stein of the Green Party. Again.
They can't make a profit delivering the paper to you without advertising, so what you're really saying is "I don't want a physical paper". Which is cool, neither do I. But it doesn't take three paragraphs to say it.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Making stupid decisions doesnt make you a victim, even if you are a member of an entire class represented by a poor decision making entity.
It does in fact make you a victim if you were encouraged into those poor decisions by fraud.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
They haven't exactly been getting away with anything, though. They've been paying federal insurance on pensions, and companies with unfunded pension liabilities have to list them on their balance sheet (which is why 1/4 of companies simply fund their pensions to avoid the bad balance sheet). If we had been demanding the same for our federal employees, we wouldn't have quite the same house of cards. In other words, the companies have been getting away with a lot less than the public sector, so glass houses and all that.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
I know that bashing Fox News is a popular opinion. But of the mainstream papers, websites, and news TV stations, it's actually rather moderate.
"Moderate"? Compared to what? There is almost endless evidence that Fox News intentionally presents a staunchly conservative viewpoint and they have an audience to match. It's not even a meaningful debate at this point.
You're just as likely to find a liberal view on a panel segment as you are a conservative one.
Just because they invite some token liberals on to some of the shows doesn't mean their coverage is remotely balanced. Fox News is basically a mouthpiece for the republican party. Name one talking head (ala Sean Hannity or Rachel Maddow) on Fox News who is a clear liberal. Go ahead, I'll wait...
Fox News gets its ratings because there are enough liberals and moderates to attract a broad audience.
The audience of Fox News contains a minority of moderates and VERY few liberals. 94% of Fox News viewers self identify as republican or republican leaning. In what universe is that a "broad audience"?
Look at who is buying newspapers now. Extreme right and left wing political donators.
Really? Warren Buffet is an "extreme" political donator?
The Detroit pensions (though not the health care), were supposedly funded. But one of the ways they did that was by borrowing money from bondholders. So they were taking on debt to pay current liabilities... a very nasty habit that will always land you in trouble. If you owned stock in a company doing that, you'd be selling. Now the pensioners and the bond holders will have to fight it out in court. The situation is not being helped by the conflicting assessments of pension health from the two different accounting firms involved. The pension auditor says that everything is (from memory) something like 87% funded. Another accounting firm using different assumptions and accounting is saying, no, it's more like 60%. In no event will the retirees get any of their health benefits, which were completely unfunded.
Personally, I think that governments should have to present unfunded pension obligations on a balance sheet, just like private companies do. That would make it easier to judge your risk as a bond holder - who might rightly feel mislead in the case of Detroit. That city was in more debt than it seemed when you include the health care promises to retirees.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
FOX, CNN, and MSNBC all cover the exact same topics.
True but not actually the important point. The viewpoint about those topics matters.
You really dont seem to get that this is theater that we are looking at. The exact same topics covered by all three.
What you don't seem to get is that you can cover the same topics with different biases and that the biases matter. Fox News demonstrably has a conservative bias and they "interpret" facts (when they aren't just making shit up) accordingly. Just because they cover the same topic doesn't mean they are presenting the same position or that they have any intention of presenting an unbiased viewpoint. Of course it is theater but unfortunately some people don't realize that and actually are dumb enough to think Fox is not presenting a biased viewpoint. Something north of 90% of Fox News' audience self identifies as republican or republican leaning. Do you seriously think that would be possible if they were presenting an unbiased viewpoint and were just reporting the facts?
ongoing tech driven decline of paper newspaper empire is interesting to many geeks.
but of course, horseshoe smiths and buggy whip companies and lamplighters took a beating during 20th century too
my grandfather was a lamp lighter. work started in morning extinguishing lamps for a couple hours, then during day repair and cleaning, then at night lighting them up again. but don't worry, after city went to electric auto timer street lamps he found jobs made possible by advances in technology.
Education. Quit a common topic actually. are you new here?
Stay sentient. Don't drink bad milk.
In that case, a headline along something like "Technology continues to squeeze the survival of traditional news outlets" would have been a lot less misleading. Having now read the linked articles, however, that happens not to be the case. With headlines like "Red Sox owner in deal to purchase Globe" and prominent mentions of pension liabilities, I saw scant mentioning of technology's role in the constant march of progress. Your grandfather's story is cool and I'm glade this post provided an opportunity for you to share it. But Soulskill has been around a while and I wouldn't have expected such a veteran author to get sloppy and begin posting stories without any effort to make it relevant.
Stay sentient. Don't drink bad milk.
If I'm a NYTs stockholder and I learned they turned down $300 million only to take $100 million and a shitty deal, I'd be thinking lawsuit.
They knew the value was declining both through the falling subscriptions and the fact that a billion dollar investment could only garner a $300 million offer back then. From there it could only get worse.
They should have sold to the highest bidder, politics be damned.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
The reason for the the two different valuations is based on what discount you use to value the future obligations and potential gains.
As I understand, Detroit was using something around 8% (or 9%), which would show that the Defined Benefit Pension Plans they offered way back would be 80% funded. When, according to an external accountant, you'd use a more realistic 5%, the funding would be less than 50%.
The reason for the the two different valuations is based on what discount you use to value the future obligations and potential gains.
Yes, that is one explanation. There are also claims of outright fraud. All of this will be an interesting fight. In any case, they didn't do any funding at all of the health care benefit, so those retirees will almost certainly be moving to Medicare. I am of the opinion that the bondholders should eat it, since the bond was clearly and transparently intended to fund the retirement plan. Anyone who bought those bonds should have known that and priced them accordingly. Naturally, this will probably be a lot of OTHER people's retirement plans will lose value. Ay, what a mess...
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Fox News demonstrably has a conservative bias and they "interpret" facts (when they aren't just making shit up) accordingly.
You dont actually seem to be saying anything. If you had a valid argument you would be showing that CNN and MSNBC werent biased.
We both know that you cannot do that.
So what are you doing here? You are showing us your own bias. You don't seem to mind at all that CNN and MSNBC are biased because apparently its the right kind of bias in your book.
Thanks for being exactly what you accuse your "enemies" of.
"His name was James Damore."
Just over 100 years ago, the Taylor family owned both the Globe and the Red Sox.
There is some concern that as a public company, the NYT Co. didn't sell to the highest bidder but one can speculate that is due to the conservative views held by the owners of the San Diego Union-Tribune. John Henry is not only a donor to liberal causes, but also has had a business relationship with the NYT Co. via their former minority ownership of the Red Sox.
because people love sports and will gladly pay. As soon as you try to get them to pay for gov't and corporate oversight the corps move in with billions and scare the hell out of everyone.
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The interesting thing is that to get the news off the internet, someone has to do the actual reporting. 90 percent of the 'news' on the internet is reporting someone else's story. I guess ultimately we'll be down to one service that provides actual reporting and everyone else with subscribe to it to do their 'reporting'.
he Detroit pensions (though not the health care), were supposedly funded. But one of the ways they did that was by borrowing money from bondholders.
Yes, but the extent to which this is true cannot be understated. The last round of borrowing to make up delinquent pension contributions was a whopping $1.4 billion, a significant percentage of the entire pension liability.
When you examine the history of it, you see that earlier (in 1991) the unions had to go to court to force Detroit to deposit any money at all into the pension funds.
It is simply not rational to claim that the public unions of Detroit are victims here. The shit was already hitting the fan over 20 years ago.
"His name was James Damore."
and for the most part they are ignorant and boring
Not just companies. Look at Detroit. It has dozens of unions and during its heyday the city unions were demanding and getting the same benefits as the auto workers. Now they have a tax base that's less than half of what it was. Simple economics.
Boycotts can still affect them.
Table-ized A.I.
I see a lot of people talking about local investigative journalism--or at least reporting.
To be fair many of you may not know the local Boston market, there are two papers: Boston Globe, and Boston Herald. Globe is the corporate-faced paper (up 'til now) owned by national media conglomerates. Herald is considered more local these days. Generally the Herald is the paper you read when you want to hear about all the dirty BS the local government is dishing, although they can be too conservative and preachy at times for my taste.
They can't make a profit delivering the paper to you without advertising, so what you're really saying is "I don't want a physical paper". Which is cool, neither do I. But it doesn't take three paragraphs to say it.
I would maintain that this is the USPS argument, where they claim bulk mail subsidizes things, but were they to raise the unit price for bulk mail one cent, their operating profit would be about as big as their current operating loss. You may recognize the Internet 1.0 "operate at a loss, and make up for it in volume!" business plan here.
But fine, let's accept your claim for the sake of argument ... crack open the books on a couple of failed newspapers.
Let's see the balance sheets ourselves with regard to color printing costs, amount subsidized by advertising, and so on. Let some academic researchers do some forensic accounting on say 5 failed newspapers. It'd be a great learning experience for people in accounting and business programs in a couple of universities about "how not to run a cash flow business", and at the same time, we'd get some honest numbers about what level of content is actually sustainable. At the very least, it'd be interesting to see how much blood the wire services suck out of these papers, and whether that has anything to do with their tipping into non-profitability.
But as you point out, the bondholders were also aware of this. I don't know what the precedent is - I suspect it will depend on whether the pension accounts are seen as Detroit money or money owned by the retirees/employees. If it is Detroit money, it will almost certainly get returned to the bondholders, but IANAL.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Well I also dont think that the bondholders are victims.
The victims are the Detroit tax payers that were not of age to vote when those pension deals were struck. The city council and the unions were both complicit in depriving these tax payers of their right of representation, basically attempting to turn them into slaves for retired people.
"His name was James Damore."
I am in complete agreement. Saddling future generations with debt for non-infrastructure is morally corrupt. The REALLY nasty part is that most people agree with this, and so we have demanded that pensions in the private sector are either fully funded, or show up as liabilities on a company's balance sheet. We do no such thing in the public sector, and where we do, we almost always exempt health coverage. People simply do not understand the issue, and politicians keep it that way when they cloud the issue with misleading statements... like when congress all of the sudden decided that the Post Office, and only the Post Office, should be forced to fully fund it's pension in 10 years without raising any new revenue. Then, the opposition starts throwing out statements like "they are funding 75 years out into the future!" instead of pointing out the real problems with the plan. I hate them all.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Why would it be any other way in the unethical US legal system?
Why would it be different elsewhere? The "ordinary folks" of the pension fund aren't the only ordinary folks who have a claim on the assets of a failed business. Other pension funds might have lent money to the business. Why should the pension fund of the business be honored more in that situation?
I've been weighing the thought of an open source news service. It may not be the most technically abled, but, I think the accuracy increases and the agendas decrease.
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