As a number of observers had predicted, John Henry has sold the Telegram & Gazette of Worcester to Halifax Media Group of Daytona Beach, Florida. Cuts loom. T&G reporter Shaun Sutner has the details. More here from the Globe’s Beth Healy.
I hope Henry will address the promise he made to staff members last fall that he would either sell the paper to local buyers or, if none could be found, continue to operate the paper himself.
Henry is keeping the T&G’s printing plant in Millbury, which suggests that he’s eyeing it for The Boston Globe once he sells the paper’s Morrissey Boulevard headquarters.
From the comments: Former T&G editor Harry Whitin, who headed a group that was hoping to buy the paper, writes: “I can say from personal experience that John Henry had absolutely no interest in finding a local buyer, unless the local buyer was willing to overpay for a company that he stripped of all its assets. Watch for layoffs of at least 20 percent of the news staff before the transfer of ownership, based on the experience at other papers Halifax has purchased. A tough day for my former colleagues.”
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The simple truth is that it’s all about the money.
I can say from personal experience that John Henry had absolutely no interest in finding a local buyer, unless the local buyer was willing to overpay for a company that he stripped of all its assets. Watch for layoffs of at least 20 percent of the news staff before the transfer of ownership, based on the experience at other papers Halifax has purchased. A tough day for my former colleagues.
He sees the Globe as a great opportunity, which is obvious. The T&G opportunity might have been less obvious, but he had the money to help turn it into a model contemporary mid-sized daily. More people get their news from small papers as opposed to large ones…
It is unfortunate that good newspaper people will loose their jobs, but it is the Newspaper “Business”. I don’t think John Henry bought the Boston Globe for altruistic reasons, there were obviously synergies between his other businesses and he saw a way to make money by buying the Globe. Selling the T&G to the highest bidder was a business decision as well. I get it that it is more personal to Harry Whitin, but it is after all a business…..
@Peter: I don’t disagree, but Henry made a pretty ironclad promise that he would either sell to local buyers or keep it himself. I understand that things change. He should explain what happened.
From what I read in the link you provided it looks like he said “this is not a forced sale, if I don’t find the right buyer you may be stuck with me”…. This after saying that he thought a local owner would be the best fit……. Hardly an ironclad promise… .
@Peter: Perhaps “ironclad” is too strong a word. I do think he should give his side of what happened.
Even as a longtime Globe subscriber it’s hard not to see that John Henry just royally screwed the people of Worcester and the people who work at the Telegram.
The first tip was that Henry had CEO Mike Sheehan make the announcement. If you are delivering good news you do it yourself. If you are not you have someone else do it.
We still don’t have the whole story about possible local bidders. A story in March said a new group was looking to bid. It quoted two Worcester businessmen who said they would buy the paper if the valuation was right. Thursday’s story said the paper was profitable last year and that advertising in the first quarter was ahead of a year ago. If that’s the case and the new owners cut staff immediately it’s because they probably overpaid. It could be the local businessmen had a better idea of the true value of the paper. But why didn’t they bid? Were they told not to bother because someone was going to overpay?
Nobody said it yet but if the Telegram sold at the high end of what was speculated, $15 million, and the Morrissey Blvd. property is worth 50 million then it means the value of Globe is roughly zero.
In the end it is hard not to think that John Henry chose to cash in at the expense of the people of Worcester. It’s probably too much to ask for that the Globe will report what really happened. We’ll probably have to see what the Herald or Boston Business Journal can come up with.
I wonder who the new owners will cut since the T&G doesn’t have a large staff. The daily paper features several Associated Press articles and the Sunday paper shares the Travel and Arts sections with the Globe.