Here’s an unexpected development: The Boston Globe, which has been losing money more often than not for years, is now turning a profit, according to publisher and owner John Henry.
“The Globe may have turned the corner finally due to management, increasingly relevant journalism, continuing strategic investment and by becoming much more efficient in all areas,” Henry said Tuesday night in response to an email query. He added: “I don’t know how long it has been … since the Globe had a profitable year but we will this year and probably next as well. As our digital growth continues the sustainability of a vibrant Boston Globe is coming into view. It’s been a long time coming.”
What prompted my email was buzz coming out of the Globe newsroom that management had claimed the paper was running in the black. It struck me as unlikely, but Henry has now confirmed it, although he did not respond to my request for some actual numbers.
The good news comes at a moment when Henry and his management team have taken an aggressive stance in contract negotiations with the Boston Newspaper Guild, the union that represents the Globe’s editorial employees and many on the business side as well. The Guild recently issued a statement denouncing management for hiring the “union-busting” law firm Jones Day, described by the Columbia Journalism Review as “notorious for aggressive anti-union tactics that journalists and union leaders say have helped downgrade media union contracts and carve employee benefits to the bone.”
I asked Henry if he was concerned that hardball tactics with the union could result in a loss of goodwill with his employees and the public. As you’ll see below, he did not answer directly. But it doesn’t seem like a good look to crack down on the union at a time when its members’ sacrifices have helped Henry balance the books. That said, negotiations often get ugly. That doesn’t mean the talks can’t be resolved on terms both sides can live with.
Henry, a billionaire financier who is also the principal owner of the Red Sox, has long lamented the Globe’s declining fortunes and the dismal state of the newspaper industry in the five years since he bought the paper from the New York Times Co. When I interviewed Henry in early 2016 for my book “The Return of the Moguls,” he said he expected to lose money both that year and the following year. “You look at the Globe — we have about $300 million a year in income and we can’t make money,” he said. “The cost of making money is high.” (Earlier this year the Boston Business Journal estimated that revenues for 2018 would range from $225 million to $250 million.)
This past July, Henry told me in an email interview for WGBH News that the losses were continuing. “The Globe cannot ever seem to meet budgets — on either the revenue side or the expense side and I am not going to continue that,” he said. “This has always been about sustainability rather than sizable, endless, annual losses. That is frustrating and due to a combination of mismanagement and a tough industry.”
Since that time, management, headed by president and chief financial officer Vinay Mehra, has cut spending on both the news and business sides. It seems to have worked, although news coverage and customer service have taken a hit. Throughout the news business, of course, revenues continue to decline. But there is reason for some optimism with the Globe. Several months ago it passed the 100,000 mark for digital subscribers, an important milestone. Globe officials have said the paper could approach financial viability if they can reach 200,000. Needless to say, that’s a lofty goal.
The full text of Henry’s email follows.
The Globe may have turned the corner finally due to management, increasingly relevant journalism, continuing strategic investment and by becoming much more efficient in all areas.
There has also been a focus on getting costs and practices closer to industry standards of major newspapers. This is something the Globe was never able to do. And this is what I believe management is continuing to do in its negotiations with the guild presently.
We want the strongest possible newsroom in the future. Much as sports teams are dependent on the talent of those who take the field every day, the Globe depends on a talented newsroom and editorial page that hopefully has the tools they need to be successful. So ultimately I believe management and the guild will find common ground in a very challenging environment for newspapers where your very survival is dependent on doing the right things day-to-day.
Both have the same overriding objectives — to provide our community with vital, serious journalism.
I don’t know how long it has been, Dan, since the Globe had a profitable year but we will this year and probably next as well. As our digital growth continues the sustainability of a vibrant Boston Globe is coming into view. It’s been a long time coming.