The Star Trib and the Globe

The Minneapolis Star Tribune‘s value meltdown would seem to auger well for the Jack Welch/Jack Connors group’s hopes of buying the Boston Globe from the New York Times Co. The McClatchy chain is selling the Star Trib to a private equity firm for $530 million, which is about half what it paid eight years ago.

Jaws dropped when Welch and Connors proposed paying the Times Co. about half the $1.1 billion it laid out when it purchased the Globe in 1993. Now, as Adam Reilly of the Phoenix observes in considering the Star Trib situation, “Sounds a lot like the Globe to me.”

But I think the Star Trib sale means the Times Co. is less likely to unload the Globe right now, not more. Why?

Consider this story in the St. Paul Pioneer Press (via Romenesko). According to media and financial analysts, the private equity firm that bought the Star Trib is likely to engage in some serious cost-cutting and then sell out in three to five years. Obviously, the new owners think they’ll be able to get a lot more than $530 million when the time comes to sell.

The Times Co. has repeatedly said that the Globe is not for sale. My guess is that the Sulzbergers have a similar strategy. As much as we may lament the cost-cutting that’s already taken place at the Globe, it could get a lot smaller in the years to come. Indeed, with increasing numbers of readers getting their news online, the major value that the Globe brings to the table is its local coverage; everything else is going to be looked at very closely.

A more-local strategy; a better idea of how to make money online; and hopes for an improved advertising climate thanks to such developments as the arrival of Nordstrom to offset the loss of those Jordan Marsh and Filene’s ads, and Times Co. executives may well believe they’ll find themselves dealing from a position of strength a few years from now.

If they were to sell right now, they’d be selling out of weakness. Which is why I think they won’t do it.