The Boston Globe: Worth a quarter billion or worthless?
New York Times business columnist David Carr asked six newspaper analysts what they thought the Boston Globe would fetch in a sale.
Carr notes in his Media Equation column that the the Globe lost an estimated $50 million last year and was said to be on track to lose $85 million this year — and the parent New York Times Co. reportedly is eager to sell it.
Carr writes:
For the family that controls the Times Company, selling The Boston Globe, a jewel of a paper bought in 1993 for $1.1 billion, was unthinkable not long ago. In 2006, the family, the Sulzbergers, declined to negotiate after Jack Welch floated a notional offer of about $500 million.
The analysts’ answers ranged from from $250 million to “we pay you to take this off our hands”
The high end of the range came from John Morton, longtime independent newspaper analyst. He told Carr:
“The Globe and its Web site were strong brand names and continued to have considerable influence throughout New England, and these factors alone have value despite the current losses.” His wild guess: “somewhere between $200 and $300 million, and if pressed for a single number I’d say $250 million.”
He added that, if a new owner is found, “any Globe employees still employed after the deal goes through will recall the contract they have just rejected as paradise compared with what a new owner will impose in cost-cutting.”
And here are the comments dealing with the low end: paying a buyer to take the Globe off the Times’ hands:
Mike Simonton, an analyst at Fitch Ratings and a close follower of the newspaper industry:
“At an estimated cash burn pace of around $40 million and no agreement on labor concessions, we’d estimate the Times Company would have to pay a buyer around $20 to 40 million in order to sever their ties with this untenable cost.”
So the Times Company would have to pay to “sell” The Globe?
“At $20 million the buyer (or assumer of costs, as they might more appropriately be referred to as) would have a cushion of around six months to develop a cost and revenue plan,” he wrote.
Reed Phillips, media analyst at DeSilva & Phillips:
“A year ago, no one would have been saying that The Boston Globe has no value. But the media world has changed dramatically since then,” he wrote. “I think the range of values that the New York Times Company is likely to get for The Boston Globe are, at the high end, not more than $50 million and, at the low end, a requirement to help fund the buyer’s acquisition with as much as $25 million contributed by The New York Times (yes, you read that right!).”
Ken Doctor, newspaper analyst at OutSell Inc.:
“The best guesstimate of the real price: a buck. The best of an announced price: between $50 and $100 million,” he wrote in an e-mail message. The devil will be in the details of the obligations that a buyer would assume, he said, adding that “a buck essentially represents a gentleman’s agreement: I take a liability, headache and a distraction off your hands.”


Steve Parker is the deputy managing editor for news, and oversees the Post-Dispatch's front page. STLtoday's online news editors are on his newsroom team. Parker has been at the paper since September 1980.
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