Globe scuttlebutt

The sale of the Boston Globe is entering its final stages amid great secrecy, both in terms of who is bidding and what the bidders would do with New England’s largest newspaper if they win.

Correction: The story’s original reference to layoffs at the Tampa Tribune was incorrect and the correct information is now included below.

The sale of the Boston Globe is entering its final stages amid great secrecy, both in terms of who is bidding and what the bidders would do with New England’s largest newspaper if they win.

The lack of information is a shame because the Globe is one of the region’s most important civic institutions. The newspaper doesn’t cover nearly as much as it did a decade ago, but even in its slimmed-down state the newspaper sets the pace for news, sports, and arts coverage in Greater Boston.

CommonWealth set out to learn each of the bidders’ plans for the newspaper, but none would talk, in some cases citing confidentiality agreements imposed upon them by the Times. So we started piecing together their plans as best we could by talking to sources involved in the sales process. What we learned is that the bidders have very different visions for the newspaper, that the Globe could decamp from its Morrissey Boulevard headquarters, and that more spending cuts are likely.

Who are the bidders? It’s been widely reported that three bidders remain: New England Sports Network, the cable channel owned 80 percent by the Red Sox and 20 percent by Delaware North, the owner of the Bruins; a large group of prominent local investors headed by Jack Griffin, who took over the reins at Time Inc. in 2010 but was ousted less than six months later, and two members of the Taylor family, which once owned the Globe; and Robert Loring, founder of Revolution Capital in Los Angeles and the owner of The Tampa Tribune.

Rumors have been swirling in recent days that the bidding process remains fluid, with Red Sox owner John Henry thinking about dropping out and other bidders attempting to jump in. Henry, through his public relations firm, declined comment. The New York Times, which put the Globe on the sales block, also declined comment. One source involved in the process said to expect the unexpected, suggesting the Times might request that bidders revise their offers or even join forces.

Are more cuts coming? From the outside, the wage and benefit cuts demanded from Globe employees by the Times in 2009 seem to have stabilized the paper’s finances, but insiders say fundamental problems remain. Revenues keep dropping, falling from $424 million in 2010 to $395 million in 2012. Advertising is off; circulation revenue has stabilized, but only because of a steep increase in subscription prices. The trend lines are not good.

The next owner of the Globe will have to either find ways to boost revenue or cut expenses. How fast that has to happen will depend on the level of debt the new owner incurs in buying the newspaper. On the revenue side, a big issue is the revenue from Globe websites. One source said digital revenue has remained fairly stagnant at $40 million a year. The source blames a talent drain from the Globe’s advertising department; other sources say the Globe needs to beef up its coverage, particularly of business, to tap new advertising. According to the Times, the Globe and Worcester Telegram & Gazette, which the Times also owns and is selling, had 1,849 employees overall at the end of 2012. Several sources said the Globe has about 400 newsroom employees, while the T&G has nearly 100.

Sources say the Griffin/Taylor group wants to keep the Globe newsroom intact, which is not entirely surprising given the long history the Taylors have with many Globe employees. The group is also trying to attract a large number of prominent local investors (names being mentioned include John Fish, Jack Connors, Steve Pagliuca, Jim Stone, Larry Fish, and Paul Sagan) to reduce the need for debt. Henry’s financing plans are unclear, but sources say he may expand the paper’s media footprint (see Globe mission section below) to bring in new revenue. Loring’s plans also are not clear, but when he bought the Tampa Tribune he fired 165 people, about 16 percent of the workforce, and cut salaries.

(Due to a reporting error, the number of layoffs implemented at the Tampa Tribune following its purchase by Robert Loring was incorrect. Those layoffs occurred prior to Loring’s takeover. Tampa Tribune editor Bill Barker says 20 employees took a voluntary buyout last year and 16 positions were also eliminated, while 147 positions were added as the paper added a St. Petersburg edition, created a Tallahassee bureau, and expanded into the Pinellas/Clearwater area. He says the company is also investing in its websites and improving its technology on a number of fronts. “Robert Loring and Revolution Capital have brought a much needed innovative and entrepreneurial point of view to our organization with an investment and growth-first mentality that is refreshing,” Barker says.)

Is the Globe moving? Some of the bidders have shown intense interest in moving the Globe and selling or redeveloping the nearly 17-acre property on Morrissey Boulevard in Dorchester where the paper is based, near the JFK/UMass Red Line stop. The assessed value of the land and buildings is $38.4 million. Estimates of the potential value of the property range from $15 million to $71 million, but one source said he pegs the value at $25 to $35 million.

The biggest stumbling block to a move is the Globe’s massive presses, which print not only the Globe but the Boston Herald, the Telegram & Gazette, the Patriot Ledger, the Enterprise of Brockton, and the regional edition of The New York Times. Many of the bidders have been exploring moving the printing operation to an underutilized printing facility owned by the Telegram & Gazette in Millbury. The facility currently prints the Saturday edition of the T&G and newspaper inserts, but the plant would need a significant update to handle the rest of the print load. Henry’s team inspected the Millbury plant earlier this month. The Griffin/Taylor group has also taken a keen interest in the Millbury facility.

Could the Globe’s mission change? The direction taken by the Globe might change if Henry prevails. Sources note that NESN, the cable sports channel that carries Red Sox and Bruins games and is owned by the two teams, is bidding for the Globe. These sources speculate that Henry, the Red Sox owner, may expand the Globe’s reach into cable TV and radio. Former Globe editor Marty Baron harbored similar ambitions. He saw the Globe leveraging its news staff to extend the brand into radio and television. The Globe has taken some tentative steps in this direction, but it would require a heavy investment to do it on a large scale.

What will happen to existing managers? The Griffin/Taylor group has let it be known that it would keep publisher Christopher Mayer and editor Brian McGrory where they are. Ben Taylor, a former Globe publisher and the likely chairman of the board if the Griffin/Taylor group prevails, originally hired McGrory as a reporter. Steve Taylor, Ben’s cousin and the second family member in the group, brought Mayer to the Globe initially. It’s unclear what other bidders would do. Loring retained Bill Barker as the publisher of the Tampa Tribune when he took over there. “Private equity comes in with a plan,” said Rick Edmonds, a media business analyst with the Poynter Institute, the nonprofit media foundation that also owns the Tampa Bay Times, the dominant paper in the region. “They typically do not run the company themselves on the ground.”

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Meet the Author

Gabrielle Gurley

Senior Associate Editor, CommonWealth

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

What will happen to the Telegram & Gazette? Most people we talked to said the T&G would probably be sold off so the new owners could focus on their prime interest, the Globe. Many assume Ralph Crowley Jr., who runs Worcester-based Polar Beverages Co., might assemble a group to buy the newspaper. He led a previous effort to buy the paper in 2009 but that ended when the Times halted the sales process.

Any intangibles at work? The Taylors are well known to the Times and, as the family that elevated the Globe to prominence, would have to be seen as worthy stewards of the paper, something the Times has said could be a factor in the sale. There has been some buzz that the Times would be uncomfortable selling the paper back to a group led by the Taylors for a fraction of the $1.1 billion the Times paid for the business in 1993, but others point out that the Times made a lot of money on the Globe over the last 20 years. Sources say Henry developed a personal relationship with Times publisher Arthur Sulzberger Jr. during the period the Times owned a portion of the Red Sox. Loring has no discernible ties to the Times.