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The FT's funky Globe-Herald rumor

Might Boston be in for a colossal media makeover? So suggests the Financial Times:

The New York Times is aggressively courting buyers for its stake in the Boston Red Sox baseball team and potentially the Boston Globe newspaper in a transaction that could attract bids worth $200m-$225m, according to a person familiar with the matter....

The latest overtures have piqued the interest of a group of wealthy Boston business leaders, who have also discussed other broader scenarios to improve the state of local media. Publishers' moves to cut costs drastically are considered to be hurting the quality of local coverage.

One scenario under consideration includes buying the whole or part of News Corp's Ottaway newspaper chain and consolidating and shutting down the Boston Globe's rival, the Boston Herald.

Patrick Purcell, owner and publisher of the Boston Herald and a former News Corp executive, was recently tapped by Rupert Murdoch's News Corp to run the company's Ottaway chain. News Corp pulled the Ottaway chain, comprised of eight daily newspapers and 15 weeklies, off the market after failing to sell the papers before a June 30 deadline.

One News Corp source said they were not currently involved in discussions. Mr Purcell was not immediately reachable. A New York Times spokeswoman had no comment [emph. added].

A few thoughts immediately spring to mind: 1) Wild! 2) Who are the "wealthy Boston business leaders" in question? (The FT mentions 2006's failed Jack Welch/Jack Connors bid for the Globe, but doesn't explicitly say that Welch and Connors still want to buy the paper.) 3) Are we supposed to assume that these prospective new owners would purchase Ottaway and the Herald and then close the latter after first purchasing the Globe? Seems so, but the language is ambiguous. 4) Might Purcell's strange ascension to the Ottaway helm have been made in anticipation of such a deal? 5) Do we really want a "group of wealthy Boston business leaders" running the Globe? Because that might compromise the paper's watchdog function. And finally: 6) How seriously should we take any of this stuff?

Also, the FT follows the WSJ in citing an oddly low Barclays valuation of the Globe, but puts the figure at $27-54 million rather than $20 million. I'm still skeptical, especially because the FT (again using ambiguous language) refers to the Times Co.'s "stake" in the Globe. Of course, the Times Co. owns the whole paper, not part of it.

  • Ron Newman said:

    Wouldn't it be a pretty serious anti-trust violation for one ownership group to buy both daily newspapers and then promptly shut one of them down?

    December 27, 2008 6:40 PM
  • GoldsteinGoneWild said:

    The NYT owns 17% of the Sox (which includes Fenway, the little racing thing, TV), which is easily north of $1b.  

    So that's 170 million of the $200m to $225m bid.  

    Which means NYT bought the thing for $1.1 billion and will now sell for $50 million, $27 million, $20 million -- who cares?

    If you're rich and looking for a hobby, and you can't afford a sports franchise, you can afford to be a newspaperman...

    December 27, 2008 6:54 PM
  • GoldsteinGoneWild said:

    Ron,probably not an anti-trust violation.  They'll define the market as "media" - TV, radio, even BlueMassGroup.

    December 27, 2008 6:55 PM
  • Tony Schinella said:

    This is really very interesting ... there are so many possibilities ... The more logical thing to me would be to spin off both the Globe and the Sox shares separately. There is an inherent conflict of interest with the Times org owning 17 percent of the Sox and having to cover the Sox on the sports pages. As well, they could probably get more money for the Globe selling the two separately.

    December 28, 2008 12:11 PM
  • aging cynic said:

    "Do we really want a 'group of wealthy Boston business leaders' running the Globe?" Yeah, like Eben Jordan and the Taylor Family; what do THEY know about running a newspaper?

    December 28, 2008 12:40 PM
  • Wes Rand said:

    Adam-

    Maybe FT updated their article but I can't find any reference to the Times' "stake" in the Globe. All the references in the article refer to the Times' stake in the Red Sox.

    December 29, 2008 12:07 PM
  • Adam said:

    Wes, I think they must have updated it. It's possible I misread, but I'm pretty sure I didn't--and the current wording wouldn't have struck me as odd.

    Also, Dan Kennedy has posted the Barclays report in question; it's at medianation.blogspot.com/.../monday-morning-odds-and-ends.html . Apparently Barclays' value range for the Globe is 12-20 million--not the 27-54 million cited by the FT. So I remain skeptical about the FT's other info.

    December 29, 2008 2:05 PM
  • Adam said:

    Hey Wes--In fact, I'm almost positive FT has updated the story. Look at the second and third grafs (from the FT article) that I cite in my original post, and then look at the story as it now stands. There's no longer a reference to "wealthy Boston business leaders," and the discussion of Ottaway/Herald scenario has become more specific.

    Also, I don't think Peter Nicholas and Jack Connors were mentioned as potential *future* buyers for the Sox stake and Globe, respectively, in the original (see my second point).

    December 29, 2008 2:14 PM
  • Scraps of Paper said:

    Pingback from  Scraps of Paper

    December 29, 2008 5:11 PM
  • Adam Reilly said:

    Sorry for the multitude of comments, Wes, but I think I've figured out what's up: there are either two or three versions of the FT story floating around the web. See thephoenix.com/.../jack-connors-i-don-t-want-the-globe.aspx .

    December 29, 2008 7:20 PM
  • Wes Rand said:

    Glad you're still on top of this, Adam. That undermines the FT's reporting even more.

    January 1, 2009 1:19 AM

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