A major American newspaper hasn’t changed hands for years, despite half a dozen either being peddled by the owners or remaining on the market and yet the desperate New York Times Co has decided to try and sell the loss-making Boston Globe at what will be a huge loss.
Reports in the Times and the Globe said the Times Co has appointed Goldman Sachs to start efforts to sell the paper. The moves follows the rejection of contract cuts by the Globe‘s main union and a threat by the Times Co to cut salaries by 23% immediately to get a $US10 million a year cost saving. Reports suggest the Times is trying to see if there is any interest in buying the paper before deciding if it should sell it. The Times paid $UAS1.1 billion for the company that owns the Globe and other papers.
The Globe’s Newspaper Guild, narrowly rejected a package of wage and benefit cuts proposed by management: the vote was 277-265. The Times Co had reached deals with six of the Globe’s seven unions last month on $US10 million worth of cuts. The Guild represents 600 editorial, advertising, and business office workers at the paper. Times Co have warned that it needed a total of $US20 million of savings from the unions or it may be forced to shut down the paper.
Hearst tried to sell the San Francisco Chronicle, but couldn’t. Huge wage and other cuts seem to have staved off closure, but it was forced to shut its Seattle daily, the Post-Intelligencer and turn it into a website-only business when no buyers emerged. The Chicago Tribune and Los Angeles Times can be bought if there are any buyers because their owners, the Tribune Co, are in bankruptcy.
There are reports creditors of the Tribune Co could get the Tribune and possibly other assets in exchange for doing a deal on their debts. There has been no real interest from outside buyers. There’s no bank money available and a 28.2% drop in first quarter newspaper advertising would be enough to drive buyers deeper into hiding.
Papers like the Rocky Mountain News were marketed, with no buyers found, and then shut this year, as was a daily paper in Tucson. The McClatchy company would sell any of its papers for a decent price, if it could, to cut debt. But it can’t.
Rupert Murdoch didn’t help this week in a friendly interview on Fox Business News — his second on Fox News in a fortnight. While Murdoch described the Globe as a fine paper, he didn’t put his hand up to buy it and he said that he thought there would be no paper papers in 20 years time, they would all be digital.
That would scare off buyers of any US paper, I’d say.
But it will raise questions in some analysts’ minds about the value of all those newspaper mastheads and goodwill in the News Corp balance sheet, especially the huge values attaching to the Wall Street Journal, his UK and his Australian papers. News wrote down some of their value (and that of some of its US TV business) in the December quarter. More to come then Rupert, if there are going to be no print papers around in 20 years?
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