BUSINESS

New York Times sells Boston Globe to Red Sox owner

By Jennifer Saba
August 03, 2013 20:04 IST

The New York Times Co has agreed to sell The Boston Globe to the principal owner of the Boston Red Sox baseball team, John W. Henry, for $70 million in cash, ending its 20-year ownership of the paper.

The transaction announced on Saturday includes the Worcester Telegram & Gazette, related digital properties of both papers, and a direct mail marketing company.

The sale caps years of uncertainty for the Globe, which was put on the auction block twice.

The price is less than a tenth of what the New York Times paid for the Boston Globe when it bought the paper for $1.1 billion in 1993. It bought the Telegram & Gazette for about $300 million in 2000.

The New England properties were the last pieces of a once much bigger empire. The New York Times Co has sold off everything - TV and radio assets, dozens of U.S. regional papers, digital companies, and its stakes in sports ventures - to focus solely on its flagship and international edition.

"We are very proud of the association we have had with the Boston Globe and the Worcester Telegram & Gazette and we're delighted to have found a buyer in John Henry, who has strong local roots and a deep appreciation of the importance of these publications to the Greater Boston community," Mark Thompson, chief executive of The New York Times Co, said in a statement.

"As a result of this agreement, we will be able to sharpen our company focus on and investments in The New York Times brand and its journalism."

Newspapers have been hit with challenges in recent years including a plunge in advertising revenue and readers who prefer to get their news on smart phones and tablets.

For the New England papers, total revenue fell 7.4 percent in the second quarter to $94.4 million on declines in advertising and circulation revenue.

Compounding the problems for the papers that likely weighed down the price: significant pension obligations and difficulty of negotiating changes with more than a dozen labor unions that represent about three-quarters of employees. The New York Times said on Thursday that it would maintain the pensions for the papers.

The New York Times first put the Globe up for sale in 2009 as it struggled with losses. But it halted the sale process and decided to hang onto the paper after winning concessions from unions and implementing cost cuts.

The company had a past relationship with Henry. The company used to own a stake in Henry's Fenway Sports Group, which includes the Red Sox, the Liverpool Football Club, and stakes in New England Sports Network cable TV channel.


Reporting by Jennifer Saba; Editing by Vicki Allen
Photograph: Lucas Jackson/Reuters

Jennifer Saba
Source: REUTERS
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