Recently I cited a Wall Street Journal piece by former Boston Globe columnist John Ellis as evidence that the New York Times Co. would not sell the Globe — at least not until it had managed to goose up its value.
Well, last night I checked out Ellis’ infrequently updated blog and discovered that he’s taken it back. He’s posted his entire Journal column, so you can finally read it without a subscription. But he adds this, in reference to Times Co. chairman Arthur Sulzberger Jr.:
I now think he should sell all of the “New England assets” (The Globe, the Worcester paper, the Red Sox stake and the NESN stake), and gather up $1 billion-plus. This would enable the Times company to enter the next (2009-2010?) recession loaded with cash.
The fact is that the Globe is doomed. Without union concessions, the cost structure doesn’t work. And the unions will never concede anything, ever. So the NYT might as well get $600 million for it now, rather than $300 million for it in 2010.
Of course, $600 million is the price that retired GE chairman Jack Welch‘s group has floated for buying just the Globe.
Interesting, speculative though it is. Ellis does not specify what kind of “union concessions” the Times Co. needs. It’s certainly my impression that Globe management is already squeezing the union pretty hard.
I did a Technorati search to see whether I was the first blogger to stumble across Ellis’ revisionist theorizing, and discovered that a financial site called Controlled Greed posted on this yesterday.
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Ellis says “The fact is, that the Globe is doomed.” Oh, please. United Airlines has lost a lot more money for a lot longer time than the Globe, and they’re not even doomed. How much money has been lost at the various Fox enterprises over the years? I guess they all would have been “doomed” at some point until Ellis changed his mind. Which, as I can see from your 1999 link, he apparently does quite a bit.
What was that famous quote about how a newspaper owner was so nonplussed about his paper losing a million dollars a year he retorted: “Oh my, at this rate we’ll have to shut down in 60 years!!!”I know I’m mangling that…what WAS that quote…?
Aaron: It was Charles Foster Kane talking about his fictional newspaper. If only real-life publishers could do that!
Damn it Dan, you beat me to it.
Ellis’ take on the Globe’s union is laughable, the union was pretty well emasculated with their last contract.
“If only real-life publishers could do that!” (Ignore the bottom line)Rich Lowry on National Review Online:“let me be frank here—we lose money. NRO is a loss leader. And here’s what’s unfortunate—the print magazine is a loss leader too. We are surrounded by loss leaders. If we ever have ideas to further our mission, they are guaranteed to be loss leaders. If your business needs advice on how to develop a loss leader, come to us. We have it down. I assure you we can help you start to lose money almost immediately. It’s our specialty. We have been doing it for 50 years and hope to keep doing it for many more.”Somebody’s following Charles Foster Kane’s business model!
ellis really does not know what he’s talking about. his valuations are inane and schizoid; his analysis is based on guesswork and google news — he clearly never picks up a phone or looks at analytics. he’s completely missed the point of the welch/o’connor bid, which is aimed at preserving the globe and herald together in boston (in some form, which we can discuss later). he is wrong about which paper is doomed: it’s the herald, alas, not the globe. he is clueless about the union situation and is merely tossing off an idelogical slap to make himself sound world-weary and wise. really, folks, this guy is as vaporous and nourishing as dennis miller or dick morris.
EB3 hereJoe O’Donnell, Jack Connors, et al buy the Globe and red sox shares. Play nicey nice get the deal done. shabang.Then they bust larry Luchino and John Henry’s balls every chance they get and when things start to spiral down (which they will) they buy the whole thing at a fire sale. They would be the only viable buyers. (Oh, I can only dream)