Former Boston Globe columnist John Ellis, a venture capitalist who disclosed earlier this year that he’d done some work for a potential buyer, warns that things are still bad at 135 Morrissey Blvd. and likely to get worse.
“How long can the NYT afford to carry the net operating losses?” he asks. “When does it make more sense to just shut it down?”
Ellis also argues that the Globe must do everything it can to hang on to what’s left of its big-name sports talent, namely columnists Dan Shaughnessy and Bob Ryan.
I revere Ryan, who, despite his veteran status, happens to be one of the hardest-working folks at the Globe. Shaughnessy’s a good read even when he’s sending me over the edge. But the idea that management might have to shell out more money to keep its stars from jumping to the Internet is galling at a time when everyone else is being asked to sacrifice.
Which is not to say Ellis is wrong. He’s probably right.
Venture capitalist John Ellis, a former Boston Globe columnist who’s been nosing around the Globe situation for months, posted an intriguing tidbit [update: but apparently wrong; see below] on Twitter a little while ago:
there’s a rumor about that Platinum Equity declined to make a “final” bid on the Boston Globe. I wonder if its true.
If Platinum is out of the picture, that would presumably leave the group put together by former Globe executive Stephen Taylor as the only remaining interested buyer. But do Taylor and company have enough capital to get the New York Times Co. to say “yes”?
I also wonder if this might pave the way for a comeback by Boston businessman Jack Connors, whose proposal to take the Globe non-profit was left by the side of the road a few months ago.
Wednesday morning update: Well, so much for that rumor. The Globe’s Beth Healey reports that both groups submitted bids for the Globe, and that a third group submitted a bid for the Worcester Telegram & Gazette.
John Ellis, who knows his stuff, believes the best option for the Boston Globe is a prepackaged bankruptcy.
A Bush cousin and venture capitalist who used to write a column for the Globe, Ellis writes that he recently worked with a group that was considering buying the paper — and that they all walked away after concluding that the situation was “hopeless.”
“No one will buy it unless the unfunded liabilities are made to go away and the union contracts are voided,” writes Ellis, who pegs those liabilites at $100 million. “That isn’t an opinion, it’s a fact.”
No one is saying that things aren’t very bad at the Globe. When you look at the numbers, you come to the inescapable conclusion that the $20 million in cuts the New York Times Co. is demanding will only tide them over for a few months.
Still, Ellis isn’t predicting that the Globe will fold. That’s important to keep in mind. When I say that I’m cautiously optimistic — and I am — I’m not suggesting that we readers are going to live happily ever after.
The Globe that emerges from all this will be substantially smaller than even the shrunken paper we’ve become accustomed to. It may have a different owner. The print edition may be cut back to three or four days a week (but not eliminated, given that print ads are still the revenue-generators). But it will, I think, still be in business.
Gallows humor: Before I could post this item to Facebook, the anti-spam robot instructed me to type “assuage Times.”
Google executive David Eun says it’s not going to happen. That is, Google isn’t going to buy the New York Times Co.
In my latest for the Guardian, I expand on John Ellis’ intriguing idea that Google ought to consider buying the New York Times Co.
One of my favorite bomb-tossers, John Ellis, has uncorked a doozy. In a column for the Web site RealClearMarkets, Ellis proposes that Google make an offer to the New York Times Co. that it can’t refuse. Ellis’ arguments:
- Mega-wealthy Google could easily afford to buy the Times Co., the price of which will only keep dropping.
- Even though the Times Co.’s controlling stock is owned by members of the Sulzberger family, who don’t want to sell, there’s a point beyond which the family can no longer screw other shareholders.
- Rupert Murdoch seems determined to transform the Wall Street Journal into a serious competitor to the Times on all kinds of news, not just financial — and he can afford to run the Journal at a loss.
- Google, like Murdoch, doesn’t need to turn a profit with a small investment like the Times — but may make money anyway if it can leverage Times content across multiple platforms.
- Times Co. chairman Arthur Sulzberger Jr. isn’t getting it done, and has been in charge for so long now that it seems clear that’s not going to change.
Ellis, a former Boston Globe columnist, offers some provocation for us locals as well, suggesting that Google could get the price down to a mere $3 billion or so by selling off the Times Co.’s other properties, including the Globe, the Worcester Telegram & Gazette and its share of the Red Sox and of New England Sports Network. (If the right buyer for the Globe can be found? Go ahead, make my day. But that’s a big if.)
Ellis’ piece is a suggestion, not a prediction. Still, it’s worth noting that in October 2006, when it looked as though a group headed by retired General Electric chairman Jack Welch might buy the Globe, Ellis wrote: “Mr. Sulzberger would be a fool, of course, to sell the Globe to anyone at this juncture.”
He was exactly right. Which raises the question of whether Times Co. executives now would be fools not to sell the Globe.
Ellis’ proposal is logical, if unlikely to happen. But given that all of our great news organizations are going to have to find new, once-unthinkable ways of surviving, I can imagine a worse fate for the Times than landing in the arms of Google, which generally, though not always, lives up to its “don’t be evil” philosophy. Better Google than Murdoch, certainly. (Via Romenesko.)
*Click here for reference.