Ellis on Welch

Have a look (sub. req.) at former Boston Globe columnist John Ellis’ latest for the Wall Street Journal, in which he analyzes the Jack Welch/ Jack Connors/ Joe O’Donnell play for the Globe. His take on how Welch managed to prevent an auction that would drive up the price is fascinating, if a little hard to follow.

Still, Ellis’ bottom line strikes me as exactly right: “Mr. Sulzberger would be a fool, of course, to sell the Globe to anyone at this juncture.”

Oh, and in case last week’s ridiculous back-and-forth over the meaning of “in play” isn’t completely dead, here is Ellis’ lede:

Last week in Boston, a group of local businessmen led by Jack Welch let it be known that they were interested in acquiring the Boston Globe from the New York Times Company for $500-$600 million. The offer served to put the Globe “in play” (as the talking heads say) and to galvanize Class B (non-family) shareholders of Times stock, already up in arms about mismanagement and financial performance.

Don’t feel as though you have to respond, Mike.

Thanks to Adam, who also points to a fuller summary of Ellis’ column for those who aren’t Journal subscribers.

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14 thoughts on “Ellis on Welch

  1. mike_b1

    Still waiting for that stock to move. For a company you say is “in play,” there sure hasn’t been any action on the pricing. It closed today at $24.07, the day’s range was $23.87 – $24.20, and it remains far closer to the 52-week low ($21.54) than its high ($29.49).Keep wishing.

  2. Dan Kennedy

    That’s right, Mike. John Ellis, a venture capitalist, doesn’t know what “in play” means. Very nice.

  3. Anonymous

    Dan,I’m sure he hangs out here in between LBO’s and mezzanine syndications. “Better to appear…”

  4. Harry

    The New York Times has 2 classes of stock. The publicly trades shares are mostly disenfranchised while the voting rights are concentrated in the second class of shares controlled by the Sulzberger family. This ownership situation means that straightforward expecations about price movements based on takeover rumors don’t have the same validity as they would in the case of a corporation with only a single class of stock.Of course if it was some other corporation (say, Halliburton) that had such an ownership stucture, the Times and the Globe would both be on their high horse denouncing it as unfair to common shareholders.

  5. Citizen Charles Foster Kane

    Lord God almighty, don’t conservatives have enough to worry about without making up hypothetical situations to bash the Globe and Times? Harry makes a good point, but then has to add “Of course if it was some other corporation (say, Halliburton) that had such an ownership stucture, the Times and the Globe would both be on their high horse denouncing it as unfair to common shareholders.” The ability of conservatives to predict with certainty what will happen in the future (actually, what will happen in the future in an alternate universe where Halliburton has a stock structure like the NY Times) is truly amazing.

  6. Dan Kennedy

    Citizen Kane: I agree, and would add this — the Times Co. put its governing structure in place at the time that it went public. If anyone didn’t like it, all he had to do was not buy any stock. Very simple.

  7. mike_b1

    Harry. Right. And it also means that the Sulzbergers can’t be pressured into selling pieces of the corporation, as Dan would have you believe.

  8. Dan Kennedy

    Mike: Harry’s explanation of the two classes of stock is something I pointed out last week. (And repeatedly over the years.) But that doesn’t make the Sulzbergers impervious to pressure, nor does it make Arthur Sulzberger Jr. impervious to pressure from other members of his family.

  9. Anonymous

    I see Ellis wrote this: “The Kennedy letter wasn’t meant for Mr. Sulzberger; it was a message to other private equity firms: We have the local pols and labor leaders on our side.”this is arrant nonsense. the letter was drummed up by the unions to pressure the globe over contract talks. It was no stagecrafted message to anyone. doesn’t ANYONE, Ellis included, bother to report any more before hurling up grandiose speculation and asserting it as insider truth? i don’t know what Sulzbergers’ quivering minions are telling him but he has only 2 smart plays:– Sell the globe (& separately the worcester paper) for the $750M the local buyers are likely to agree to ASAP, then use that dough and anything else he can get his hands on to buy up that Class B stock with the eventual goal of taking his business private again.– hold onto the globe for 2 years on the off-chance the herald croaks and somehow retail ads come back into favor. at that point he’d still be nuts not to sell the globe and he’d have lost two years’ value on the $750M he might be looking at now.

  10. mike_b1

    Nothing dysfunctional about my household. But this is as much a nonstory as the Kerry thing (John, not Healey) — something that media types, some with vested interests — pick up on while Wall Street snores. I would bet dollars to donuts that this time next year, the Globe is still owned by the NYT.

  11. Anonymous

    Anon5:42 Do you know what irony means?Peter Porcupine is a pompous fool. Him slamming Kerry for being holier-than-thou is the definition of irony.Mike_b1 is sometimes annoying, but there’s nothing ironic about his comments here.

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