Globe columnist Steve Bailey, having broken the news that Jack Welch and his rich buddies were interested in buying the Boston Globe, reports today that it’s not likely to happen. Why? No one — certainly not the New York Times Co. — is going to sell the Globe when it’s at the bottom of the market.
Still, Bailey offers some intriguing stuff on how it could happen. Throw in the Times Co.’s Worcester Telegram & Gazette, Boston.com and its share of the Red Sox, and suddenly you’re talking about a price that would approach the $1.1 billion the Sulzbergers paid for the Globe in the early 1990s (not when you factor in inflation, though).
My prediction: The Times Co. will sell in two or three years, when the newspaper economy has recovered enough for the Globe to bring a better price. And Jack Welch will not be the owner.
Clarification: I wrote that Bailey “broke” the story, but the Herald had it at more or less the same time.
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Dan, do you still think the Globe is “in play?”
Bailey appeared on WRKO this morning, and specifically used the term “in play.” You are utterly alone on this non-issue, Mike.
Great. Bailey and you say nothing nothing’s going to happen, but that the company is still “in play.” John Kerry couldn’t have said it any better.
where are these predictions of an upturn in newspapers’ performance cycles coming from? there is no favorable market wind out there blowing in any direction. this is major oldthink. the times needs to dump now. bailey, who is 10 times smarter than the nitwits on the Times boatd, is offering them a formula that makes sense. (i’ll lay out reasons when i get more time.) boy i wish i got paid what times execs and boardies get to be stupid all the livelong day.
I beg to differ, Dan. The newspaper industry is just going to get uglier. The most concerning issue is that the rate of subscription decline is INCREASING. It’s not falling in a long, slow fashion: it’s falling at an increasingly rapid rate. Meantime, Boston.com’s growth is now at a mature, incremental rate. There is a business model around the web, but it relies on the low cost of production and distribution that the web allows. The Globe still has the high costs of news print, print production, and transportation costs to grapple with. I don’t see how this makes for a better story in “a few years.” On the contrary.
Anon 11:28: The hope is that the advertising business will recover somewhat, that Nordstrom’s will be buying ads, and that the online business model will come into focus a little more clearly. But the sort of calculations that you’re talking about are exactly what the Sulzbergers must be discussing right now. So, yes, the Globe remains in play. (Couldn’t resist.)
Here’s a silly question,If the newspaper industry is in such bad shape, how come investors keep wanting to buy them?
Scavengers are always looking for their next meal, copy editor. There is almost always someone willing to pony up a few (or more) bucks to grab a distressed property, cut its costs, then flip it.What I think is overlooked is how the trade media has overtaken mainstream media in advertising revenue. What it says to me is that newspapers are getting niched to death.
For a model of print-online synergy that’s already working look no farther than Computerworld (the leading IDG publication based in Framingham). They are having one of their most profitable years ever at Computerworld and — far from being a revenue asterisk — online revenue is actually set to EXCEED print revenue. At the same time, print revenue is (get this) UP, not down. Computerworld’s print and online staff is completely integrated and works as one team. The key differentiator? Who knows. But for one thing, Computerworld is privately owned. Vision to vision, not quarter to quarter.
At the company I run print revenue is up year-over-year as well … and by a lot. Our approach is to point out that the Internet is the great equalizer — in cyberspace any Tom, Dick or Harry can look like IBM — while print is an exclusive club only for the big boys. And the big boys (and some little boys who want to be big) are buying into it. Our page counts and yields are up.
Mike has an excellent point. The Globe has done a particularly lousy job of brinin g itself on-line; They have unqualified, unfocused mob discussions instead of reader participation. I mean, we all know Aerosmith is the best band in the world and the Yankees suck; do I really need the Globe on-line to tell me that?Even Gannett is using the Web to engage readers:http://wired.com/news/culture/media/1,72067-0.html