US: NY Times retreats from Globe sale plans
Oct 15
The New York Times Company has indicated that it is abandoning plans to sell off the Boston Globe, after the newspaper publisher failed to receive any sufficiently attractive offers for the ailing publication.
The New York Times, the company’s top newspaper, reported today that two bids worth were received for the Boston Globe. Sources told the Times that the company’s valuation of the publication – which has encountered severe losses in the last few years – was significantly higher than the $US35 million ($A38 million) believed to have been offered by the bidders.
The publisher offered little in the way of detailed explanation, saying in a statement only that “after careful consideration and analysis, we wish to tell you that we have terminated the process to explore the sale of The Boston Globe, Boston.com and related businesses, and they will remain within The New York Times Company”. Chairman Arthur Sulzberger indicated last month that an improving balance sheet at the ailing Globe meant that its sale was no longer necessary, and that it could be back on the way to profitability in the foreseeable future.
At one stage earlier this year, executives said that the Globe was on track to lose $US85 million ($A92 million) in 2009, bringing its future into doubt as the New York Times Company looked to offload it. Aggressive cost-cutting measures since then – including terse negotiations with labour unions over employees’ pay – have improved the situation. But the size of the rejected bids for the Globe highlights the extent of the publication’s slide in recent years; back in 1993, the New York Times Company paid $US1.1 billion for the paper.
The New York Times Company’s struggles highlight the effects of the recession on media companies; many in the United States have been forced to sell off assets in a bid to remain competitive. The New York Times’ overall debt level across all its operations soared above $US1 billion ($A1.1 billion) at the halfway mark of this year.
Cyril Washbrook October 15th 2009