One of the groups seeking to buy the Boston Globe from the New York Times Co. is considering a non-profit ownership arrangement, according to a report by the Globe’s Beth Healy.
The group — headed by Partners HealthCare chairman Jack Connors and Boston Celtics co-owner Stephen Pagliuca — has “proposed a ‘civic approach’ that would involve a nonprofit foundation to help fund and run the news operation,” writes Healy, citing an unnamed source.
The other bidder is a group headed by Stephen Taylor, a prominent member of the family that sold the Globe to the New York Times Co. in 1993.
What Healy does not specify (and perhaps Connors and Pagliuca themselves haven’t decided at this point) is whether we’re talking about a pure non-profit or a hybrid model.
A hybrid involves setting up a non-profit organization as owner and operator of a for-profit newspaper, an arrangement that has succeeded for the St. Petersburg Times (owned by the Poynter Institute) and, locally, by the New Hampshire Union Leader (the majority owner is the Nackey S. Loeb School of Communications).
Under the hybrid model, a newspaper still has to turn a profit, and the St. Pete Times and the Union Leader have not been immune from cuts. But non-profit owners are generally willing to tolerate far smaller profit margins than large, publicly traded corporations, whose executives have to worry about quarterly reports and the expectations of Wall Street.
The pure non-profit model got its biggest boost earlier this year in a New York Times op-ed piece by Yale investment executives David Swensen and Michael Schmidt. Turning newspapers into endowed institutions, they argued, would insulate them from the economic pressures that are destroying the business. (U.S. Sen. Ben Cardin, D-Md., has filed legislation that would help turn that vision into a reality, though it’s not clear why a change in the law would be necessary.)
As I’ve written before, though, there is a huge problem with the pure non-profit model: in order to take advantage of the the tax incentives that would make it work, the newspaper’s executives would have to stop endorsing political candidates and engaging in other forms of purely political speech. That may work for public radio and public television (after all, the government has been regulating the airwaves since the 1920s), but it would be anathema to a newspaper’s mission.
Another aspect of the Connors-Pagliuca bid that’s unclear is what role the two men see for themselves if they’re not going to be owners in the traditional sense. It all sounds very public-spirited, but I can’t imagine they’re going to invest their time and money without reserving a very large say over how the Globe is run.
Two years ago I explored various ownership options for the Globe in an article for CommonWealth Magazine. You can read it here.
The Times Co. has clearly lost interest in owning the Globe. Check out Adam Reilly’s latest, in which he notes that the company can’t even bring itself to acknowledge publicly that it’s trying to sell the paper, even though it’s, you know, trying to sell the paper.
The sooner this can get done, the better.
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Didn't the Globe's spotlight team have an expository report on Partners in 2008? Interesting that their chairman is now considering a bid on the paper.
If it is the Connors-Pagliuca group, look for the involvement of Pat Purcell in some capacity.
"The Times Co. has clearly lost interest in owning the Globe. Check out Adam Reilly's latest, in which he notes that the company can't even bring itself to acknowledge publicly that it's trying to sell the paper, even though it's, you know, trying to sell the paper."Yea, so…?Can you cite, Dan, some legal requirement that mandates their admitting that they are trying to sell?If not, your comment seems rather petty.I gather you're not comfortable on the outside looking in.Maybe you should go borrow a billion or so and enter the partnership yourself….Try YOUR hand at managing something larger than a seminar.
Looks like a great deal for Taylor. Sell the paper for $1.1 billion in 1993, get 16 years to build financially with that money and buy it back for considerably less in '09.Dan, I remember a controversy a few months back over the valuations of the Globe. I haven't read about it since. Any updates on what the price might be?
Dan,I'm not sure what value a newspaper brings to the question of endorsements of political candidates. I'm agnostic on the question, but is there research to suggestion that editorial endorsements carry any weight with the electorate?
Good question, Paul. I haven't seen any (research), but that has about as much meaning as an editorial endorsement. I believe many factors in a campaign outweigh them. To me, the issue would be the freedom to make one.— Larz
Paul: If newspapers couldn't make endorsements, how would we know whom to vote against?As Larz says, this is a freedom-of-expression issue. What we really ought to do is repeal Lyndon Johnson's corrupt 1954 law that bans non-profits from engaging in political speech. But until that happens, I am very leery of the pure non-profit model for newspapers.By the way, I think endorsements can be influential in local races. Last spring, both of our papers decided not to endorse in the school committee contest. I actually e-mailed folks at both papers and got a private briefing on the pros and cons of each candidate. Very helpful in making up my own mind.
First, I am in favor of newspapers endorsing candidates, as long as it is open and notorious.The law is corrupt? How so, Dan. If there is corruption, it is in the implementation of the law; the law is not inherently corrupt.Implementation of the law is a governmental function, so the corruption necessarily stems from the governmental function. Yes it's the people they are the corrupt ones, but they work though the administrative process.I disagree that that non-profits, subsidized by their favorable treatment under the tax codes, should be able to espouse patently political positions. Governmental encouragement/endorsement without legislative action, however indirect, is not in the interests of a robust democracy.I find it odd, Dan, that you, an advocate of expanded governmental participation in the daily life, should suddenly find terminal fault with governmental implementation of the law.
Adam: Got $50? My honest answer is that I have no idea, but we will soon find out. Willingness to take on unfunded pension liabilities will be a big part of it.