As the Globe turns
The timing did not suggest the best news sense in the world, but high-stakes deal-making evidently doesn’t take its cues from lowly ink-stained newsies. In the wee hours Saturday morning, the deal was struck between the New York Times Co. and John Henry that will make the commodity trading billionaire who already owns Boston’s most storied sports franchise also the owner of its newspaper of record.
The $70 million cash deal for The Boston Globe did make it into Saturday’s late edition of the Globe, where it got full banner headline treatment. (It would be fun to know if there was a “hold the presses” order on Morrissey Boulevard as the paper scrambled to get final confirmation of the sale, first word of which came Friday night via a single-sentence post on the blog of former Globe sportswriter Peter Gammons.)
Conversation immediately turned to what the sale will mean for sports coverage in the Globe. As if to underscore the point, coverage of that issue varied wildly, depending on the source. The Globe story acknowledged all the potential for conflicts with a new owner who also owns the city’s most iconic sports franchise, but its story also featured lots of hometown bouquets being tossed Henry’s way. To hear the real reservations about what the deal could mean for sports coverage in the Globe, you had to to go yesterday’s Times, which offered a much more unvarnished view, but one that had insider Globe knowledge all over it.
In a piece written by former Globe sports writer Peter May, veteran Globe columnist Bob Ryan doesn’t mince words in raining on the parade of niceties being showered on John Henry. “This was the last circumstance anyone would want,” he told May. “It’s nothing anyone would wish. It’s scary, to say the least, for all involved.”
For his part, Henry said in a statement released on Saturday night, “Now that I have a prospective role in Globe leadership, if I were foolish enough to try to influence Sox coverage by the Globe, I would only succeed in diminishing the value of both great institutions.”
In central Massachusetts, the question is what the sale will mean for the future of the Telegram & Gazette, which is included in the deal. Speculation had been that a new owner would quickly look to unload the Worcester daily, but Northeastern University journalism professor Dan Kennedy tells the T&G that he thinks it’s possible that Henry will keep the paper.
The Herald jumped on news of the sale by playing up complaints from losing bidder U-T San Diego that it had outbid Henry but still not been chosen, something the Herald terms a “bombshell allegation,” with U-T CEO John Lynch saying it could delay the deal with Henry from closing. The Globe gets in on the lower-bid-wins storyline today, with a piece reporting that three of the different bidding groups actually offered more than Henry.
The real question, of course, is whether Henry will actually be a winner by acquiring the paper. As Ken Doctor points out on the Nieman Journalism Lab site, unlike the options open to other recent buyers of struggling newspapers, the Globe has already made most of the moves papers have turned to in trying to adapt to the new digital age — all seemingly to no avail, as numbers keep falling across almost all important categories — circulation, circulation revenue, print ad revenue, digital ad revenue.
Much has been made of the greater than 90 percent discount Henry is getting on the $1.1 billion the Times paid for the Globe and he Worcester Telegram 20 years ago. But $70 million is still real money, even to a guy whose boat alone is worth more than a third of that. Nevertheless, a savvy commodities trader like Henry doesn’t go overboard in gushing about the futures market for newspapers. “I sat with various publishers and, in studying the challenges newspapers face across the country, I became extremely interested in potential solutions,” he said in a response on Saturday to questions from the Globe. “I’m not sure that anyone has successfully put forward a sustainable financial model for metros given the magnitude and consistency of revenue declines, but if I were going to bet on one it would be The Boston Globe.’’
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MEDIAWith more on the Globe sale, Dan Kennedy has some pressing questions for John Henry and his plans for the Globe. Slate’s Matt Yglesias notes that, when factoring in the $110 million in Globe pension costs the Times Co. will retain, the Henry purchase actually pegs the Globe’s value at negative $40 million. Henry tells the Telegram & Gazette that he will visit the Globe today but won’t comment on his plans until his purchase is completed in 30 to 60 days. The Herald speaks with two bidders who say they outbid Henry, and raises the prospect of a shareholder lawsuit. Of course, the notion of an actual shareholder revolt is remote, considering that the Times Co. had a mandate from the Sulzberger clan to dump the Globe as quickly as possible, as a way of reinstating a lucrative special dividend for the family.
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