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Times devalues Globe. What's next?

If you pay about $1.4 billion for something, only to decide later that it's actually worth about $600 million, that's a bad investment.

And that's exactly what's happening with the New York Times Co. and its New England Media Group, which just announced that it posted a $648 million loss in the fourth quarter of 2006 after writing down the value of the Boston Globe and the Worcester Telegram and Gazette by $814.4 million (!). Here's the AP's write up, here's the Herald's, and here's the Globe's.

Dan Kennedy notes that the change suggests the Times Co. agrees with would-be local owner Jack Welch and friends, who've said they value the paper at between $500 and $600 million. "Do the Sulzbergers believe the newspaper market is going to bounce back?" Dan asks. "Or is it look out below? The answer to that question will determine whether and when the Globe gets sold."

Here's my take: if the Times Co. planned to unload the Globe, they'd have done it before telling the world the paper wasn't actually worth all that much. In light of today's news, don't expect the Globe to be sold any time soon.

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