By Dan Kennedy • The press, politics, technology, culture and other passions

Buy high, sell low

There’s an ugly symmetry to the news that the New York Times Co. is soliciting bids for the Boston Globe.

Having paid $1.1 billion for the Globe in 1993, half the market capitalization of the entire Times Co., the Sulzberger family may now find there is virtually no interest in what once once its second-most-prized asset after the Times itself.

After the Boston Newspaper Guild narrowly rejected a proposal to cut salaries by about 10 percent and eliminate about 190 lifetime job guarantees, the Times Co., as expected, imposed a 23 percent pay cut. And the Guild, as expected, has appealed to the National Labor Relations Board.

What’s unclear today is the status of the lifetime job guarantees, widely thought to be a major stumbling block to any effort to sell the paper. Today’s Globe story, by Keith O’Brien, isn’t quite as explicit as I’d like it to be, but the gist seems to be that the guarantees remain in effect at the Guild — at least for the time being — and the paper’s other unions have given them up.

In the Boston Herald, Jay Fitzgerald and O’Ryan Johnson interview Poynter Institute business analyst Rick Edmonds, who wrote an excellent post the other day suggesting that the Globe was closer to break-even than is generally assumed.

Edmonds tells the Herald that the lifetime guarantees and the ongoing labor crisis remain major stumbling blocks to a sale: “Having these different things going on makes it considerably harder, if not impossible, to sell this newspaper.”

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27 Comments

  1. NewsHound

    The Guild loves the Boston Globe and now after what has happened this spring, hates the New York Times Company worse than ever. Based on that the Guild would welcome a new owner and attempt to cooperate to rebuild the Globe with a prospective owner with similar goals.The Globe's value is a slight premium over break-up liquidation value as the newspaper economy and the Times response to it has done quite a job on destroying the goodwill, but there is opportunity for the right buyer, if there is a right buyer.If the financial obligation attached to The Globe is greater than the overall value of assets a bankruptcy of the subsidiary may occur so that all could move forward.

  2. Pax Arcana

    Just a quick note, Dan — It's O'Ryan Johnson, not Ryan O'Johnson.

  3. Dan Kennedy

    Pax: Good grief. Shouldn't blog when I'm running out the door. Now fixed. Thanks.

  4. Treg

    Dan, why is it always lifetime job guarantees, lifetime job guarantees, lifetime job guarantees? As has been pointed out, it's a bargaining chip. Management isn't giving up enough and Guild members are being asked to give up too much. Why should they give in?I love it – now the lifetime job guarantees make it impossible to sell the paper. Is there anything in the newspaper business those lifetime job guarantees – freely awarded by the Times Co. when they bought the Globe, with no one holding a gun to their heads – can't destroy?As Mooney said – RED HERRING. It's obvious the Globe won't cover it that way, but why do you play along?

  5. Dan Kennedy

    Treg: The lifetime job guarantees are not a red herring at all. They make the paper very difficult to sell. You ought to try talking with some outside financial analysts.

  6. ShelT

    1. NLRB fight, combined with lifetime job guarantees, will impede sale.2. Purchase price will mirror TJX mega-loss in sale of Jack & Jill stores.3. New owner will not undo revenue loss to Craigslist, Monster, Auto.com, et al.4. New owner will not get desired demographic to read a print edition.5. Not forgiving NYT deplorable handling of negotiations, but Globe Guild members in a dream world if they believe "so much talent" will protect them against economic reality.

  7. Treg

    Ok, Dan, so why doesn't management GIVE something in order to negotiate away those pesky lifetime job guarantees?The reason they're a red herring is that they have a price, like everything else. The Times Co. agreed to them in the first place – how smart was that? So, eliminate them. But nothing's free.The disparity between what Guild members and management are being asked to sacrifice is truly egregious. How smart would the Guild be to give in on the lifetime job guarantees without getting anything for them?

  8. O-FISH-L

    A caller to Howie Carr's WRKO program raised a great point yesterday. How many of the 140 Guild members who couldn't be bothered to vote for their jobs, managed to make it to the polls on November 4 to vote for Obama?Someone should do a quick study.

  9. Treg

    Fish, care to illuninate? Because I don't see any point at all.

  10. meamoeba

    o-fish, how is that a great point? how many of those 140 prefer peaches to nectarines? someone should do a quick study because it is equally relevant.as for lifetime job guarantees, they are a red herring. unless the paper folds, those folks have guarantees with or without the lifetime tag. it's called seniority. donovan slack will be laid off before brian mooney, as will hundreds of other reporters, copy editors and other editorial-side guild members who came after him. all this hue and cry is meaningless because even if they give those written guarantees up, the paper would then have to bargain for skipping seniority in order to lay them off. this is basic labor 101. why is it being overlooked by everyone?

  11. O-FISH-L

    Sure, Treg. Dan's post rehashes that such a critical vote was rejected by a narrow margin. Dan previously labeled it "inexplicable" that 20% of Guild members didn't even bother to vote. The Herald called the 20% apathy "astounding." Yesterday, a caller to Howie Carr's program raised a great point. How many of the 140 who missed the opportunity to vote on their jobs, didn't dare miss the opportunity to vote for Obama last fall? Got it?Meamoeba, you help make my point (and the caller's). If 140 Globe employees prefer Obama to work, that's quite telling.

  12. meamoeba

    so if say, for the sake of argument, 65 percent of those 140 voted for obama, (let's even bump it up to 75 percent because you'll accept that)that's unforgivable and telling but the other 35 ( or 25) percent, who were mccain/palin voters, probably had an acceptable reason?o-fish, turn the volume down and step away from the radio with your hands behind your back. you're becoming dangerous.

  13. meamoeba

    but on the point that it's "inexplicable" and "astounding" that so many didn't vote with their livelihood on the line, i concur, o-fish. but i also never grasp why 75 percent of people don't vote in town elections which have a far greater impact on their lives, wallets and kids than presidential elections. but yours and howie's obamahate adds nothing to this conversation and is head-scratching, to say the least.

  14. Treg

    Fish, there is still no point to that. So what?Meamoeba – thanks for that. The lifetime job guarantee non-issue is something the Times Co. and Globe management harp and harp on because it has a nice union bashing ring to it. It would be nice if more people picked up on it. Oh, those greedy unions!

  15. actfour

    Survival of The Globe and the Guild long time doesn't look great, to say the least.But with new owners and new attitudes amongst everyone, negotiated prior to the conclusion of a transfer of ownership, may be beneficial to the majority of workers, a new owner, and especially too, the readers and citizens of our state.The best chance of The Globe's survival now is with a new owner relationship with employees and as far as the old union days and job guarantees – forget it.

  16. NewsHound

    Many of those who failed to vote may have chosen so simply because either way they didn't see how they could win this battle.

  17. mike_b1

    Guys, guys, stop bickering! If you want to see O-Fish's point, just ask him to remove his hat.

  18. Dan Kennedy

    Ok, Dan, so why doesn't management GIVE something in order to negotiate away those pesky lifetime job guarantees?Treg, have I been saying nice things about management? I don't think so.

  19. bostonmediawatch

    How many of the people with lifetime guarantees still work there?

  20. Treg

    Dan – no, you certainly have not been saying nice things about management, and I don't mean to imply that you have. I'm simply reacting to the one-sided focus on the lifetime jobs issue we're getting just about everywhere. And I think to the extent we focus on them as some symbol of how the Guild members just don't "get it," we're playing into management's hands. The job guarantee issue is just another bargaining chip.

  21. Ryan

    I actually think it's pretty unlikely that any serious "analyst" thinks the lifetimes are preventing a sale, or are even a major block. at best, they'll survive till the contract is up — at the end of this year. they were never really a big issue, but the Times did a nice job of convincing reporters, and media critics, that they were. otherwise, there are still plenty of excellent reasons to not buy the globe. my advice to dan would be to do some actual reporting instead of acting as (at best) a filter. it's not that difficult. good luck.

  22. Dan Kennedy

    Ryan: I'll say it again — talk to some outside financial analysts.

  23. NewsHound

    The lifetime jobs are gone. The employees can cooperate to work with a new owner to save the Boston Globe but they are not going to save their unions, at least not to the strength and benefits it has enjoyed in the past. And, I think that is why so many people didn't vote. There was no way to win.But at least a new owner who is open and honest and treats employees with respect can save many jobs in an attempt to save The Globe, or prolong its existence in print form.I think the unions will welcome a more courteous and respectful attitude. It will beat the alternative, at least for some who share the same enthusiasm. Otherwise, there will be no sale.

  24. rozzie02131

    I don't work at the Globe. But if I were trying to decide how to vote in the Guild election, I'd compare the choices. Hmm, 23% pay cut but, maybe, job security until the whole thing collapses. Or, a 10% pay cut, a whole bunch of unpaid holidays, a stiff increase in health insurance, frozen pensions. Either way, I probably lose about the same. After all, both packages save the same $10 million, don't they? Yeah, in this world I'd be glad to still have a job, but I can't decide which proposal is worse, so why should I vote one way or the other? Sorry, Joe Fitzgerald, it has nothing to do with my love of newspapers or the Boston Globe institution. It'll kill me to see them go. But casting this vote would be no way to show that.

  25. O-FISH-L

    meamoeba, three days before the election, a poll of the staff at Washington Post owned slate.com found 96% planned to vote for Obama. At the WaPo itself, ombudsman Deborah Howell admitted, "I'll bet that most Post journalists voted for Obama. I did."Your claim that Obama somehow only garnered a mere 65% of the vote at the ultra-liberal Globe" (let's even bump it up to 75 percent because you'll accept that)" is a nonstarter.—Treg wrote: "Fish, there is still no point to that. So what?"Treg, a wise man once said, "We make time for the things that are most important in life." When asked to pay $5 for a declining paper, some of us like to know what's important (Obama or a job) in the lives of the people writing our news, 'tis all.

  26. Dan Kennedy

    Fish: The Post survey was of journalists, who constitute a minority of Guild members at the Globe. So the 65 percent figure might be closer than you think.

  27. Treg

    Fish – And yet again, I ask, "SO WHAT?????"You're just like one of those people who point out the Twin Towers looked like the numeral 11, and they go, "See?" and we go, "Yeah, so?"Just for fun (and go ahead and talk down to us if necessary), why don't you just spell out whatever it is you think you're getting at?

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