Tag Archives: New York Times Co.

Would John Henry sell the T&G to an out-of-state chain?

Worcester skyline. The Telegram & Gazette headquarters is the larger building on the left.

Worcester skyline. The Telegram & Gazette headquarters is the larger building on the left.

John Henry has some explaining to do to the people of Central Massachusetts. According to the Telegram & Gazette of Worcester, a paper that Henry acquired along with The Boston Globe last year, Henry may be preparing to sell the T&G to Halifax Media Group, a chain based in Daytona Beach, Fla. Halifax owns 35 daily papers, mainly in the Southeast.

Rick Edmonds, who analyzes the news business for the Poynter Institute, writes, “Halifax’s way of operating remains mysterious but appears typically to involve newsroom layoffs and a booster-ish editorial tone.” Edmonds’ article is recommended reading, as it has a lot of details about Halifax and its competitors in the community-newspaper business — including GateHouse Media, which owns about 100 papers in Eastern Massachusetts.

The idea that Henry might sell the T&G to an out-of-state chain with a penchant for cost-cutting is alarming. But would he really do it? Back in November, he met with the T&Gstaff and said his preference was to sell to local owners — and that if such owners didn’t materialize, he might keep the paper.

Read the entire article at WGBH News.

Photo (cc) by Terageorge and published under a Creative Commons license. Some rights reserved.

Local buyers exit Worcester Telegram bidding

Harry Whitin

Harry Whitin

This article was published previously at WGBH News.

This week’s Boston Globe-related media news continues, as the Telegram & Gazette of Worcester reports that the only potential local buyers for the paper have withdrawn.

Retired T&G editor Harry Whitin and Polar Beverages chief executive Ralph Crowley had been mentioned as possible buyers since 2009, when the New York Times Co. first put the Globe and its related properties (including the T&G) up for sale. John Henry, who bought the Globe late last year, told the T&G staff in November that he hoped to sell the paper to someone local, and that he might hang onto it if he couldn’t find the right buyer. (Henry also said he would keep the T&G’s Millbury printing plant — a facility that is likely to be used to print the Globe and handle its contract work, including the Boston Herald, after Henry sells the Globe’s current headquarters on Morrissey Boulevard in Dorchester. He recently confirmed that move in an interview with Boston magazine.)

Now, though, Whitin and Crowley are out, with Whitin telling the T&G’s Shaun Sutner: “For all intents and purposes, we have withdrawn from the process.”

Today’s T&G story also quotes Tim Murray, CEO of the Worcester Regional Chamber of Commerce and the former lieutenant governor, as saying that Henry should sell the paper at a discount if that means transferring it to local owners, just as the Times Co. sold the Globe to Henry out of a sense that he would prove to be a good steward. Here’s Murray:

The fact of the matter is The New York Times gave a discount to a local buyer for The Boston Globe because they had a buyer who professed to be committed to the region, Greater Boston and the journalistic mission that newspapers play. And therefore it is not unreasonable for Mr. Henry to extend that same courtesy to the residents of Worcester in contemplating a sale.

Sutner quotes me regarding two national chains — GateHouse Media, which owns about 100 papers in Eastern Massachusetts, and Digital First Media, which owns several papers not far from Worcester, including The Sun of Lowell and the Sentinel & Enterprise of Fitchburg.

Of the two, I think Digital First would be the more interesting choice. Headed by the bombastic John Paton (profiled in 2011 by David Carr of The New York Times), his company — which includes papers such as The Denver Post and the New Haven Register — has been trying to innovate its way out of the financial morass in which the newspaper business finds itself.

Digital First employs some of the most respected thinkers in digital journalism, including editor-in-chief Jim Brady and digital transformation editor Steve Buttry. Here is a press release on Digital First’s most recent initiative, Project Unbolt, which seeks to remove the “bolts” that still keep local journalism attached to the industrial processes that defined pre-Internet newspapers. Digital First also has a content partnership with GlobalPost, the pioneering online international news service founded five years ago by Boston media entrepreneur Phil Balboni. (I wrote about some of Paton’s early moves in New Haven in my book “The Wired City.”)

The Telegram & Gazette is a major media presence in Central Massachusetts. I still hope it ends up in local hands — or that Henry decides to keep it. But if it’s going to be sold to a national chain, the staff and the community could do worse than to be served by a company that is trying to revive the business of local news.

Six takeaways from BoMag’s big John Henry profile

John Henry

John Henry

This article was posted earlier at WGBH News.

The local media community has been buzzing since Tuesday, when Jason Schwartz’s 5,000-word Boston magazine article on the state of The Boston Globe under John Henry went live. The piece is chock-full of goodies, and you should read the whole thing. As you do, here are six takeaways for you to ponder.

1. It could have been a lot worse. Although we knew that Douglas Manchester, the right-wing hotel magnate who bought the San Diego Union-Tribune and unforgivably renamed it U-T San Diego, was interested in buying the Globe (he even threatened legal action after it was sold to Henry instead of him), it is nevertheless chilling to read Schwartz’s account of Manchester’s coming in and kicking the tires after the New York Times Co. put the Globe up for sale.

As I wrote in my book about online community journalism, “The Wired City,” Manchester has been described as “a minor-league Donald Trump” who uses his newspaper to promote his business interests as well as conservative causes such as his opposition to same-sex marriage.

In the Boston magazine article, Globe editor Brian McGrory tells Schwartz that “some potential bidders” — and by “some,” it’s clear that he’s including Manchester — would have “cut the living bejesus out of the place.” And Schwartz includes this delicious anecdote: “During the U-T San Diego presentation, people who were in the room attest, Manchester at one point instructed McGrory to call him ‘Papa Doug.’ McGrory did not call him Papa Doug.”

2. It’s official: The Globe is moving. Even before Henry won the Globe sweepstakes, it was clear that the next owner was likely to sell the paper’s 1950s-era Dorchester headquarters for redevelopment — a move that would presumably recoup virtually all of the $70 million Henry paid to purchase the Globe, the Telegram & Gazette of Worcester and related properties.

Henry has now made it official, telling Schwartz his goal is to move the paper to a smaller space with better access “in the heart of the city.”

Of course, the Globe still needs a printing press, not only for its own use but for other publications it prints under contract — including its tabloid rival, the Boston Herald. One likely possibility: the Telegram & Gazette’s printing facility in Millbury, which Henry said he was keeping when he announced recently that he was putting the T&G up for sale.

3. The two-website strategy needs an overhaul. Since the fall of 2011, the Globe has offered two websites: BostonGlobe.com, a paid-subscription site offering Globe content and a few extras; and Boston.com, a free site that’s been around since the mid-1990s.

The problem, Schwartz tells us, is that Boston.com, stripped of most Globe content, has been struggling, while BostonGlobe.com hasn’t produced as much revenue as Globe executives would like. The next step: a looser paywall for BostonGlobe.com to encourage more social sharing and a mobile-first Boston.com that’s still in development. (Joshua Benton has more at the Nieman Journalism Lab.)

4. Henry wants to reinvent the newspaper business. This week’s New Yorker includes a rather dispiriting account by George Packer of how Jeff Bezos and Amazon.com took over the book business. Anyone looking for signs that Bezos has a clear idea of what to do with The Washington Post, which he agreed to buy just days after Henry’s purchase of the Globe was announced, will come away disappointed — although he is, to his credit, spending money on the Post.

By contrast, Henry comes across as energized, bristling with ideas — peppering Brian McGrory with emails at all hours of the night — and getting ready to unveil new products, such as standalone websites that cover religion, innovation and other topics.

“I wanted to be a part of finding the solution for the Globe and newspapers in general,” Henry tells Schwartz. “I feel my mortality. I don’t want to waste any of the time I have left, and I felt this was a cause worth fighting for.”

5. Mike Barnicle is lurking off stage. If you were worried when you spotted Barnicle with Henry during the World Series, well, you were right to be. Barnicle, who left the Globe in 1998 after a career full of ethical missteps finally caught up with him, really does have Henry’s ear — and even supplied him with the email address of John Allen, the National Catholic Reporter journalist whom Henry successfully talked into coming to the Globe.

The old reprobate hasn’t changed, either, supplying Schwartz with a great quote that artfully combines religion with an F-bomb.

6. The executive team is now in place. By accepting publisher Christopher Mayer’s resignation, naming himself publisher and bringing in former Hill Holliday president Mike Sheehan as his chief executive officer, Henry has completed a series of moves that have remade the top layer of Globe leadership. McGrory is staying. Andrew Perlmutter, who made his bones at Atlantic Media and The Daily Beast, has replaced Jeff Moriarty, who left for a job in Britain, as the Globe’s chief digital strategist.

That’s not to rule out further change, especially if Henry’s goals aren’t met. But the sense you get is that Henry — to use a Red Sox analogy — now has his Larry Lucchino/Ben Cherington/John Farrell triumvirate in place. No doubt they all realize that winning a world championship is a lot easier than finding a profitable way forward for the beleaguered newspaper business.

Conflicts of interest and the new media moguls

5790408612_8952178d3f_mWashington Post executive editor Martin Baron has rejected a demand by a group of left-leaning activists that the Post more fully disclose Amazon.com’s business dealings with the CIA.

Nearly 33,000 people have signed an online petition put together by RootsAction, headed by longtime media critic Norman Solomon, to call attention to Amazon’s $600 million contract to provide cloud services to the CIA. The Post’s owner is Jeff Bezos, the founder and chief executive of Amazon. Here is the text of the petition:

A basic principle of journalism is to acknowledge when the owner of a media outlet has a major financial relationship with the subject of coverage. We strongly urge the Washington Post to be fully candid with its readers about the fact that the newspaper’s new owner, Jeff Bezos, is the founder and CEO of Amazon which recently landed a $600 million contract with the CIA. The Washington Post’s coverage of the CIA should include full disclosure that the sole owner of the Post is also the main owner of Amazon — and Amazon is now gaining huge profits directly from the CIA.

Baron, in his response, argues that the Post “has among the strictest ethics policies in the field of journalism, and we vigorously enforce it. We have routinely disclosed corporate conflicts when they were directly relevant to our coverage. We reported on Amazon’s pursuit of CIA contracts in our coverage of plans by Jeff Bezos to purchase The Washington Post.” Baron goes on to point out that the Post has been a leader in reporting on the National Security Agency and on the CIA’s involvement in the Colombian government’s fight against an insurgency, writing:

You can be sure neither the NSA nor the CIA has been pleased with publication of their secrets.

Neither Amazon nor Jeff Bezos was involved, nor ever will be involved, in our coverage of the intelligence community.

(Note: I first learned about the petition from Greg Mitchell’s blog, Pressing Issues.)

The exchange between RootsAction and Baron highlights the conflicts of interest that can arise when wealthy individuals such as Bezos buy in to the newspaper business. It’s a situation that affects The Boston Globe as well, as its editors juggle the lower-stakes conflict between John Henry’s ownership of the Globe and his majority interest in the Red Sox.

Baron himself is not unfamiliar with the Red Sox conflict, as the New York Times Co., from whom Henry bought the Globe, owned a minority stake in the team and in New England Sports Network, which carries Red Sox games, during most of Baron’s years as Globe editor.

The way the Globe handled it during those years was just about right: don’t disclose in sports stories, but disclose whenever the paper covers the Red Sox as a business. Current Globe editor Brian McGrory has insisted that Henry will not interfere. Henry, in a speech before the Greater Boston Chamber of Commerce last week, said he would not breech the wall of separation between the Globe’s news operations and its business interests.

Of course, it’s not as though the era in which news organizations were typically owned by publicly traded corporations was free of such conflicts. (The Times Co., after all, is a publicly traded corporation, though the Sulzberger family calls the shots.) Media critic Danny Schechter noted in his book “Embedded: Weapons of Mass Deception” that MSNBC — then in its pre-liberal phase — was a cheerleader for the war in Iraq even as its then-corporate parent, General Electric Co., was a leading military contractor.

But the rise of a new breed of media moguls such as Bezos, Henry and Aaron Kushner of the Orange County Register, who buy their way into the news business with their own personal wealth, seems likely to bring the issue of conflicts to the fore. The same is true of a media entrepreneur of a different sort — eBay founder Pierre Omidyar, who is launching an online venture called First Look Media with (among others) the journalists Glenn Greenwald and Laura Poitras.

It is the very fact that these individuals have been successful that makes them such intriguing players in the quest to reinvent the news business. But disclosure and non-interference need to be at the forefront of their ethical codes.

Chris Mayer to step down as Globe publisher

Chris Mayer

Chris Mayer

Boston Globe publisher Chris Mayer was his usual affable self when we exchanged New Year’s greetings this morning at the Mandarin Oriental hotel. He knew something very few others knew — that he would be announcing his departure before the end of the day. But no doubt he’d come to terms with that as early as last August, when Red Sox principal owner John Henry agreed to buy the paper from the New York Times Co. for $70 million.

Mayer, like me and several hundred other people, had turned out for a breakfast speech by Henry before the Greater Boston Chamber of Commerce. The soft-spoken Henry didn’t make much news. He talked about his soccer and baseball teams for so long that I wondered if he would ever get around to his newspaper. When he did, it was to say he planned to apply the same formula to turning around the Globe that he did to reviving the Red Sox — hard work and smarts, leavened, he hoped, with good fortune.

“No one has a magic bullet for newspapers,” Henry said. “We have to get it right at the Globe, and we’ll work as hard as we need to do to do that.” And though he talked about boosting the paper’s coverage in areas in which it excels — particularly in local coverage — he conceded that it meant cutting back in some other, unspecified areas as well.

If it’s smarts that Henry is looking for, Mayer has plenty. A longtime Globe veteran who got the top job in 2010 following a string of Times Co. executives, Mayer was a popular choice both inside and outside 135 Morrissey Blvd. Moreover, he deserves much of the credit for some key business-side decisions made in recent years, such as raising the price of the print edition and introducing the paper’s two-website strategy — the subscription-based BostonGlobe.com and the free Boston.com.

Still, it’s hardly a surprise that the new owner would want to pick his own publisher. Last week came word that the Globe was hiring Hill Holliday chairman Mike Sheehan as an advertising consultant, a move that seemed more Henry than Mayer. And this morning Henry announced that he was seeking a chief operating officer to run the Globe — a person who, one might assume, could be handed the title of publisher as well. (Craig Douglas of the Boston Business Journal covers Mayer’s departure here and Henry’s talk here.)

With Mayer leaving, it’s time to start wondering how committed Henry is to keeping Brian McGrory as the Globe’s editor. Owners hire publishers; publishers hire editors. And Mayer’s successor may want to put his or her mark on the paper by choosing the Globe’s top news executive. It’s hard to imagine how anyone could have done a better job than McGrory, who oversaw the paper’s Pulitzer-caliber coverage of the Boston Marathon bombings as well as important enterprise projects. But it’s hard to imagine how Mayer could have done a better job, either.

The message today, in case anyone had missed it before, is that Henry didn’t inherit the Globe — he bought it. And though he seems sincere in talking about the paper as a public trust, he’s making it clear that he intends to run it as he sees fit.

Four takeaways from new owner John Henry’s message to readers of The Boston Globe

John Henry at celebration of the Red Sox' 2007 World Series victory.

John Henry in October 2007

This article was published earlier in the Nieman Journalism Lab and The Huffington Post.

John Henry’s nearly 2,900-word message to readers of The Boston Globe could have been little more than an exercise in public relations, standing up for what is good and deploring what is bad.

There’s a lot of that, of course. We’re only into the second paragraph before he dutifully informs us that the Globe “is the eyes and ears of the region in some ways, the heartbeat in many others.” But Henry, a billionaire financier who is the principal owner of the Boston Red Sox, is also unexpectedly revealing about himself and how he intends to run the Globe. (Henry purchased the Globe, its BostonGlobe.com and Boston.com websites, the Telegram & Gazette of Worcester and several smaller properties from the New York Times Co. for $70 million. The sale, announced in August, closed last week following a brief delay over a labor dispute at the T&G. Henry also made a bit of news when folks at the T&G noticed that his message omitted Worcester entirely.)

Henry’s piece, headlined “Why I bought the Globe,” takes up a full page in the Opinion section of Sunday’s paper. It’s teased on the front page as well. He writes about his life, the Red Sox, the financially struggling news business and what he thinks needs to be done to set it on a sustainable path. Here are what I think are the most important takeaways.

1. He plans to be an activist owner. Just the atmospherics of the essay itself are a pretty strong indication that Henry does not see this as a passive investment. He wants to be the face of the Globe.

To counter his image as a reserved, slightly eccentric rich guy who dabbles in sports, Henry goes into some detail about his involvement in the civil-rights movement and his subsequent retreat “into what most of my friends thought was my primary talent at the time — writing and performing rock music.”

Somewhere along the way he made a lot of money, but he writes about that only briefly. Instead, he describes his stewardship of the Red Sox as a possible model for what he intends to do with the Globe:

When we acquired the Red Sox, profit was literally at the bottom of our list of goals. We were determined to do whatever it took to win.

Now I see The Boston Globe and all that it represents as another great Boston institution that is worth fighting for.

Here’s another intriguing example of what sort of profile Henry intends for himself as the Globe’s owner: Recently the Boston Business Journal reported that toxic waste at the Globe’s Dorchester property could complicate any plans Henry might have to develop the site and move the paper to a cheaper location. Henry used his Twitter feed to dispute the BBJ’s story and slam an earlier piece about the Globe’s break-up with a classified-ad site called Cars.com:

A feisty newspaper owner who fights back in public? Bring it on. That’s certainly an improvement over the gray management style of the Times Co.

2. He’s looking for advice in all the right places. If the Globe and other large regional dailies are going to survive and prosper, they need to develop new ways of doing business. So it’s encouraging that Henry mentions alliances the paper already has with Harvard’s Shorenstein Center, the MIT Media Lab and the Nieman Journalism Lab.

Henry also gives a shout-out to Clay Shirky, which I take as a signal that Henry is reading and talking to the right people. It doesn’t sound like he intends to take the approach adopted by Aaron Kushner, a one-time Globe suitor who’s winning plaudits for trying to revive the Orange County Register by focusing on the print edition. The Globe has been a leader in digital journalism. So it’s good news that Henry sounds like he’s going to double down on innovation.

3. He has some retro ideas about paid content. Near the top of his commentary, Henry repeats an old trope, writing that newspapers have been losing money because “Readers were flocking from the papers to the Internet, consuming expensive journalism for free.”

Now, I’ve got nothing against charging for digital subscriptions, and the Globe has had some success with that — 39,000 at last count. But it’s important to keep in mind what newspaper owners are up against in asking readers to pay for online access.

As has often been said, newspaper readers never paid for the news — they paid for the expense of printing and delivering the paper, with advertisers picking up the rest. These days, readers are paying — a lot — for their own printing presses (computers, tablets and smartphones) and their own delivery (broadband and cellular access). It’s perfectly understandable that they don’t want to pay more.

What went wrong was not that newspapers started giving away their content but, rather, that the advertising model collapsed, especially from classifieds. Henry understands this, writing, “I feel strongly that newspapers and their news sites are going to rely upon the support of subscribers to a large extent in order to provide what readers want.”

I wish any newspaper owner well in persuading readers to pay for journalism. But we have to understand that we are asking them to do something they’ve never done before: pay for news in addition to paying for printing and delivery. We need to be humble about how much we’re asking of our audience.

4. He wants the Globe to act as a guide to the larger conversation. One of the most important roles professional journalism can play is to aggregate and curate the torrent of information — not just when big news breaks, but on a daily basis.

The New York Times does this with The Lede; the Globe does it from time to time, as it did following the Boston Marathon bombing. The idea is to become the go-to place for trustworthy links to other news sources, blogs and citizen media. Henry clearly gets that, writing:

We will provide what we will call the Globe Standard when it comes to curated links that will ensure our readers do not waste their time when they click on news, reviews, writers, columnists, ecommerce, events, opportunities, and social engagement from any of our platforms.

One thing Henry gets absolutely right is that the newspaper business is not now and never was compatible with ownership by publicly traded corporations and the quarterly demands of Wall Street. For more than a generation, corporate chains slashed newsrooms, first to drive up profit margins, later to stave off mounting losses. The debt they took on to build their chains is one of the prime reasons for their inability to set themselves on a new path. Henry understands that.

“I soon realized that one of the key things the paper needed in order to prosper was private, local ownership, passionate about its mission,” Henry writes. Farther down, he adds: “But this investment isn’t about profit at all. It’s about sustainability. Any great paper, the Globe included, must generate enough revenue to support its vital mission.”

Leaving aside the obvious fact that profit is a key to sustainability, Henry articulates a vision in which journalism comes first — which is another way of saying the customer comes first. Too many newspaper owners have forgotten that.

Photo (cc) by Patrick Mannion and published under a Creative Commons license. Some rights reserved.

Why John Henry should dump Times content

Screen Shot 2013-10-25 at 2.07.20 PMThe New York Times Co. no longer owns The Boston Globe. Now is the moment for new owner John Henry to take the next step: stop running Times content in his paper.

I’m suggesting this not because I dislike the Times. Rather, I’m suggesting it because the Globe’s best, most engaged readers are those who are most likely to read the Times, too. There’s nothing quite like reading the Globe and coming across a shortened Times story on a national or international event to make you feel like you’re reading Times Lite.

For example: The story above, by New York Times reporter Robert Pear, takes up about 750 words at the top of page A2 in today’s Globe — and 1,170 words on page A18 of the Times.

For many years — even for the first decade or so of Times Co. ownership — the Globe never ran Times articles. Instead, the Globe supplemented its own coverage with journalism from wire services and from newspapers such as The Washington Post and the Los Angeles Times.

Somewhere along the line, though, someone at the Mother Ship decided the Times Co. could save money by running Times articles in the Globe. It’s hard to argue with the math — no matter how they did the accounting, it was essentially free content.

I don’t know how many people subscribe to both the Times and the Globe. The number may be very small. But those double subscribers tend to be journalists, community leaders and opinion makers — the very people Henry needs to court as he embarks on his new career as a newspaper owner.

Dumping the Times would serve as an emphatic statement that he intends to chart a new, independent course for the Globe.

Globe publisher calls BBJ report “misleading”

Boston Globe publisher Christopher Mayer is disputing a report that toxic contamination at the paper’s 16-acre Dorchester property could interfere with any plans incoming owner John Henry might have to move the Globe and redevelop the land.

In an internal message to Globe employees that I obtained, Mayer refers to the story as “misleading,” and says the contamination will not be an obstacle to redevelopment.

Craig Douglas of the Boston Business Journal wrote on Tuesday that pollution from underground diesel tanks, first discovered in 1996, has led the Massachusetts Department of Environmental Protection to ban “any work or potential development that might disturb sections of chemical-soaked soil in their present state.” [Note: Douglas responds below.]

The $70 million purchase of the Globe has already been delayed by a labor dispute at the Telegram & Gazette of Worcester, which, like the Globe, is being sold to Henry by the New York Times Co.

Douglas’ story makes it clear that the such problems are not unusual in urban areas, and that the typical solution is rehabilitation and reuse. But he notes that such efforts can run into the tens of millions of dollars depending on the seriousness of the contamination.

Douglas reports that the Globe and the New York Times Co. declined to comment and that Henry could not be reached.

Mayer’s message to employees refers to “reports,” but the news was broken by the BBJ. For instance, this article in Go Local Worcester, posted on Wednesday, credits the BBJ.

I have emailed Douglas for a response to Mayer’s message.

The full text of Mayer’s message follows.

Dear Colleagues,

I would like to address recent press reports concerning environmental conditions at The Globe’s headquarters on Morrissey Boulevard that raised questions about the safety of two areas of the property.

These reports are misleading. The conditions referred to are nearly two decades old and measures taken at that time addressed the issues that were identified.

Like any property holder with industrial activity conducted on its site over several decades, The Globe has, on occasion, needed to address environmental conditions. Development on the site is governed by health and safety rules and regulations, but it is not prohibited or banned.

Indeed, during the sales process, and prompted by requests from potential buyers (including John Henry), The Globe conducted an updated environmental assessment that did not identify any environmental conditions that warranted further review.

Chris

Christopher M. Mayer
Publisher, The Boston Globe
President, New England Media Group

Update. Craig Douglas responds: “As your blog suggests, there is nothing misleading in our story. The environmental reports we cited speak for themselves, making it clear there are certain activities and uses that are prohibited on the Globe’s property in its current state. We never claim or infer, as the Globe’s publisher suggests, that those problems can’t be remediated or that the Globe employees are exposed in any way to health risks.”

Update II. It’s official: John Henry is now the owner of The Boston Globe, the Telegram & Gazette, Boston.com and several smaller properties. (6:41 p.m.)

Update III. I missed this earlier, but I thought it was worth flagging as a sign of how Henry might respond to negative news coverage. (Saturday.)

 

Globe cuts Your Town staffing in half

Just catching up with this. Jon Chesto of the Boston Business Journal reports that The Boston Globe’s Your Town sites are being trimmed by six correspondents — approximately half the staff. Your Town, part of the Globe’s free Boston.com website, provides hyperlocal coverage of the suburbs as well as of several Boston neighborhoods.

Screen Shot 2013-09-16 at 8.38.56 AMGlobe regional editor David Dahl tells Chesto that there will be no site closures. But it seems inevitable that there will be cuts in coverage, even though Globe staff reporters and freelancers will continue to contribute. There are more than 100 Your Town sites and about 15 related Your Campus websites covering colleges and universities in Greater Boston.

Your Town got off to a shaky start in 2008, as GateHouse Media — which operates Wicked Local sites in virtually all of the same communities targeted by Your Town — sued the New York Times Co. (the Globe’s owner, at least for a few more weeks) for copyright infringement, arguing that the Your Town sites in some cases aggregated virtually all of GateHouse’s content for a given community without offering much else.

The two sides reached an out-of-court settlement in early 2009, as I reported for The Guardian. Your Town eventually grew into a valuable resource in many communities. But it looks like the sites, which carry little advertising, got to be too expensive to operate.

Chesto writes that the cuts call hyperlocal coverage into question as a business strategy, noting that AOL’s Patch sites are in the midst of deep cuts as well. But though hyperlocal may well be a loser at the corporate chain level, there are a number of successful independent sites operating across the country. You could read a book about such sites, hint, hint. The real issue is that hyperlocal is best understood as a grassroots phenomenon.

Did Globe executives reach this decision on their own? Or was incoming owner John Henry involved? And if he was, what does that say about his priorities for the Globe?

(Disclosure: Journalism students at Northeastern as well as several other Boston colleges and universities contribute to the Your Town and Your Campus sites.)

BBJ scores big on two local media stories

The Boston Business Journal has come up aces during the past week with two meaty stories on local media news.

• A shaky future at the Globe. The first, published last Friday, found that confidential financial documents put together by the New York Times Co. suggest The Boston Globe was in slightly worse shape than outside observers might have imagined when the paper and several affiliated properties were sold to Red Sox principal owner John Henry for $70 million in early August. The BBJ’s Craig Douglas writes (sub. req.):

In essence, Henry is buying into a borderline breakeven enterprise already teed up for $35 million in cost cuts over a two-year period before he even walks through the door.

How bad is it? According to the documents cited by Douglas, advertising revenue at the New England Media Group (NEMG) — mainly the Globe, the Telegram & Gazette of Worcester and Boston.com — is expected to be 31 percent below the 2009 level next year. And paid print circulation revenue continues to slip despite price increases at the Globe and the T&G.

You may have heard people say at the time of the sale that Boston.com was worth more than the Globe itself. Well, I don’t think you’ve heard me say it. Print advertising remains far more valuable than online, and that holds true at NEMG as well. Douglas writes:

The Globe is by far the biggest revenue generator of the group, accounting for 69 percent, or about $255 million, of its forecasted revenue this year. The Telegram & Gazette in Worcester is next in line at $42.5 million in forecasted revenue this year, while Boston.com is on track to book about $40 million.

Print products account for about 88 percent of NEMG’s total annual revenue. That heavy reliance on print-related advertising and circulation revenue has proven particularly problematic of late, as both categories have lost ground since 2009 and are forecasted to see continued deterioration for the foreseeable future.

Douglas’ story is protected behind a paywall, but if you can find a print edition, you should. Suffice it to say that John Henry has his work cut out for him. The picture Douglas paints is not catastrophic. But it does show that the Globe is not quite as far along the road toward figuring out the digital future as some of us might have hoped.

• Tough times ahead for local papers. The other big media splash, which I linked to last night, is Jon Chesto’s analysis of the sale of Rupert Murdoch’s Dow Jones Local Newspaper Group (formerly Ottaway Newspapers) to an investment firm affiliated with GateHouse Media. The papers sold include three prominent Greater Boston dailies: The Standard-Times of New Bedford, the Cape Cod Times and the Portsmouth Herald, on the New Hampshire seacoast.

Chesto’s article is part of the BBJ’s free offerings, so by all means read the whole thing. It’s a real eye-opener, as he explains as best anyone can at this early stage what the sale and simultaneous bankruptcy of GateHouse will mean for local papers and the communities they serve. Unfortunately, indications are the news will be very bad indeed.

Fairport, N.Y.-based GateHouse, which publishes about 100 local papers in Eastern Massachusetts (including The Patriot Ledger of Quincy, The Enterprise of Brockton and The MetroWest Daily News of Framingham), will somehow be combined with the entity that holds the former Ottaway papers into a new company with the uninspired name of New Media (that may change). (Update: Chesto is a former business editor of The Patriot Ledger, which no doubt helped him write his piece with a real air of authority. And thanks to Roy Harris for reminding me of that.)

The deal with Murdoch — at $82 million, quite a bit more than I had anticipated — was done through Newcastle Investment Corp., a real estate investment trust that is part of Fortress Investment Group, which in turn is GateHouse’s principal backer.

The powers-that-be are already talking about slashing the Ottaway papers, which are among the best local dailies in the region. Chesto writes:

The papers are described as “under-managed by News Corp.” with “expense reductions of only 6% since 2010.” Translation: We can take more out of the expenses than News Corp. did. GateHouse has been an aggressive cost cutter in recent years, most notably with efforts to consolidate most of its page design and layout functions. That work was centralized in two locations, including an office in Framingham. But it will soon be downsized further, into one location in Austin, Texas.

Yes, Murdoch, the “genocidal tyrant,” is likely to prove a better steward of local journalism than the people he’s selling to.

Post-bankruptcy, with $1.2 billion in debt off their backs, the executives now running GateHouse are going to be empowered. According to a presentation put together for investors, Chesto writes, New Media may spend $1 billion to buy up local media companies over the next three years.

Chesto doesn’t say so, but if I were working for the Eagle-Tribune papers north of Boston (The Eagle-Tribune of North Andover, The Daily News of Newburyport, The Salem News and the Gloucester Daily Times), I’d be polishing that résumé right now. On the other hand, those papers have already been cut so much under the Alabama-based CNHI chain that it’s not like a new owner could do a whole lot worse.

At a time when there are reasons to be hopeful about the newspaper business thanks to the interest of people like John Henry, Jeff Bezos and Warren Buffett, the GateHouse deal shows that there are still plenty of reasons to be worried about the future.