Venture capitalist John Ellis, a former Boston Globe columnist who’s been nosing around the Globe situation for months, posted an intriguing tidbit[update: but apparently wrong; see below] on Twitter a little while ago:
there’s a rumor about that Platinum Equity declined to make a “final” bid on the Boston Globe. I wonder if its true.
If Platinum is out of the picture, that would presumably leave the group put together by former Globe executive Stephen Taylor as the only remaining interested buyer. But do Taylor and company have enough capital to get the New York Times Co. to say “yes”?
I also wonder if this might pave the way for a comeback by Boston businessman Jack Connors, whose proposal to take the Globe non-profit was left by the side of the road a few months ago.
Wednesday morning update: Well, so much for that rumor. The Globe’s Beth Healey reports that both groups submitted bids for the Globe, and that a third group submitted a bid for the Worcester Telegram & Gazette.
Adam Gaffin notes that the Boston Herald covered a fire in Chinatown yesterday that “exposed illegal bedrooms, shoddy electrical wiring and a possible gambling operation.”
Friday was deadline day for bidders seeking to make an offer to buy the Boston Globe and the Worcester Telegram & Gazette from the New York Times Co. And it appears there’s not much to report.
New York Times media reporter Richard Pérez-Peña writes that it’s not even clear whether the two contenders for the Globe, a group led by former Globe executive Stephen Taylor and California-based Platinum Equity, had submitted bids.
Each had reportedly offered to pay $35 million as well as assume pension liabilities of $59 million. Jessica Heslam had reported in the Boston Herald that the estimate of those liabilities had recently been revised upward to $115 million. Pérez-Peña quotes sources who confirm the upward revision, but suggest the error was not quite as great as that.
It’s hard to know what to believe. I can tell you that I’ve heard the actual pension liabilities may be even higher than what Heslam’s sources told her. The truth may be that such estimates are hard to nail down, and that opinions differ.
Meanwhile, Telegram & Gazette reporter Shaun Sutner breaks the news that former T&G editor Harry Whitin is involved in a group that is seeking to buy the paper separately — the first indication that the Globe and the T&G might be split up. (The Globe runs the story as well.)
The money guy is identified as Ralph Crowley, the president and CEO of Polar Beverages.
The Times Co. bought the Globe in 1993 for $1.1 billion and the T&G in 2000 for $296 million.
Several months ago, a T&G source explained to me all the multifarious ways that Globe and T&G operations had been combined over the years. I was left with the distinct impression that it would be an expensive proposition to try to separate the two at this point.
But if the two papers end up with different owners, I suppose it wouldn’t be that difficult for them to reach an agreement to continue joint operations that make sense.
Tomorrow is the day that the New York Times Co. has set to accept final offers to sell the Boston Globe. And Media Nation is picking up some well-informed buzz that things are not going well with either of the two prospective buyers — a group led by former Globe executive Stephen Taylor or Platinum Equity, owner of the San Diego Union-Tribune.
Like any reader of the Globe, I have a rooting interest in this. I’d like to see the Taylors make a comeback. But even if they can pull this off, you have to wonder if they’ll be so under-capitalized that the cutting will resume almost immediately.
Will the Taylor group really be able to pull off a deal to buy back the Boston Globe from the New York Times Co.? Today’s Globe piece on Stephen Taylor’s quest to acquire the paper his family sold in 1993 reports that he’s having some trouble scaring up enough money. Beth Healy writes:
Some wealthy Bostonians spurned Taylor’s early overtures, wary of investing in what they consider a dying industry, according to people involved in the bid. With final offers due tomorrow, Taylor is still scurrying to raise money. He has to convince investors he has what it takes to make it in a radically shifting newspaper landscape, despite having been out of the business for nearly a decade.
That fits with information I reported two weeks ago, when I wrote that the Taylor group was still trying to line up investors.
Meanwhile, the Boston Herald’s Jessica Heslam reports that the price of purchasing the Globe and the Worcester Telegram & Gazette may have risen substantially. Both Taylor and Platinum Equity, the only other serious bidder, have reportedly offered to pay $35 million and to assume $59 million in pension liabilities. Now, though, Heslam quotes anonymous “insiders” who say that the esimate of pension liabilities has nearly doubled, to $115 million.
Hard to tell what’s going on here. Heslam quotes a Times Co. spokeswoman who says something that sounds vaguely like a denial, but not really. So, for the moment, let’s proceed under the assumption that Heslam’s sources are right. Will this kill the deal? Especially with the under-capitalized Taylor bid?
It’s possible that the Times Co. will be forced to eat some of that $115 million, like Theo Epstein getting rid of another overpaid, under-performing shortstop. Even though the Globe carefully notes that it’s “conceivable the Times Co. won’t sell the paper,” Poynter Institute media analyst Rick Edmonds recently noted that the Times Co. would lose substantial tax advantages if it doesn’t sell by the end of 2009.
It will be fascinating to see what gets announced tomorrow. That is, if there’s an announcement.
One can only imagine the glee that folks at the Boston Globe must have felt when they came across a photo of prospective owner Tom Gores looking like he’s starring in the community-theater remake of “Saturday Night Fever.” The photo leads a long piece on Gores’ tenure at the San Diego Union-Tribune.
Wearing a flamboyantly pinstriped black suit jacket over a black shirt strategically unbuttoned to show off his smooth chest (and don’t miss the black-and-white polka-dot handerchief), Gores comes across as an exceedingly unlikely candidate to stabilize the Globe’s finances while preserving its journalism. The story dwells in some detail on embarrassing facts about Gores’ personal life as well.
I should note that the photo is credited to Gores’ firm, Platinum Equity. So he must be quite proud of it.
Still, you never know. Platinum is one of two groups in the running to purchase the Globe and the Worcester Telegram & Gazette from the New York Times Co. The other, favored by most people I talk with, is headed by former Globe executive Stephen Taylor and former Globe publisher Ben Taylor, prominent members of the family that sold the paper to the Times Co. in 1993.
Platinum Equity has been the subject of fascination since it acquired the Union-Tribune earlier this year. But as the Globe story notes, though the paper’s staff has been slashed to ribbons, the Union-Tribune is now on track to turn a small profit this year. Quality matters; but nothing is possible at a paper that keeps bleeding cash.
The non-profit news site Voices of San Diego, which has been keeping a watchful eye on Platinum, recently ran a piece containing what might be described as cautious praise. The story quotes an anonymous staff member following a meeting with management: “I went into the meeting not super-receptive, given that this is the management team that had laid off more than 100 people the day before. I came out feeling better about the future of the paper than I have in two years.” The story continues:
Two other newsroom workers agreed with that assessment, and all three said they were hopeful and impressed by the new management’s willingness to criticize the old regime. (The staff members requested anonymity for fear of antagonizing the new bosses.)
The positive feelings are remarkable considering how the U-T has been plagued by poor morale and severe financial troubles in recent years. The paper has physically shrunk by about half since 2006, and several rounds of layoffs and buyouts have eliminated about half of all jobs companywide.
To be sure, there is a lot of low-hanging fruit at the Union-Tribune. Employees still paste up pages manually, a labor-intensive practice that is now being eliminated. But for the Union-Tribune to achieve financial stability so quickly, and for management now to be talking about growth, is an impressive achievement given the dire straits in which the newspaper business finds itself.
Still, I’d certainly feel better if the Taylor group prevails. Yes, the Globe has to succeed as a business. But with the Taylors, I’m more confident that managers would seek to define the journalistic mission first, then figure out how to pay for it.
The Globe’s coming back tomorrow with a look at the Taylor group. I expect to see a photo of Steve and Ben dressed in tasteful, non-ostentatious business suits, their jackets off and their sleeves rolled up, serving meals at a homeless shelter before heading in to work.
Boston Newspaper Guild treasurer Patrice Sneyd has filed charges against Guild president Dan Totten, according to Boston Globe reporter Robert Gavin. Totten is accused of misappropriating money or property, violating the union’s constitution and disobeying orders. The Guild is the largest union at the Globe.
Totten, out on leave, has previously denied any improprieties. Sneyd’s action could lead to an internal trial. Though it strikes me as odd that Totten could be accused of mishandling funds without law enforcement somehow becoming involved, perhaps we’ll find out soon exactly what has been going on. (Via Romenesko.)
The following e-mail has been sent to the members of the Boston Newspaper Guild, the largest union at the Boston Globe. A copy was obtained by Media Nation earlier today.
September 25, 2009
Dear Colleague,
I understand that many questions have arisen from yesterday’s e-mail from the Executive Committee regarding alleged financial impropriety by BNG President Daniel Totten.
As treasurer, I have a fiduciary responsibility, which I take very seriously. I intend to fulfill that responsibility to the fullest extent. I assure you that the Executive Committee is asserting due diligence on this matter. Once made aware of the situation, the appropriate steps were taken to ensure the safety of your union funds.
The second order of business was to notify you. It would have been preferable to notify you, and file the charges simultaneously. But time constraints did not allow that to happen. We took the position that notification was our next priority.
We are guided in this process by the constitution of the CWA [the Communications Workers of America], our parent union. The by-laws require that charges be filed within 60 days from the time an offense becomes known. I intend to draft the charges and file them early next week with our Recording Secretary Kathy McCabe, as required by the by-laws. We are well within the 60 day time frame. After they are filed, members will be notified of the details of the charges.
I know that there may be more questions as this process moves forward. We are working with the guidance of legal counsel from both the CWA and the BNG. We will keep you updated as more information becomes available.
The Globe and the Herald today report that Boston Newspaper Guild president Dan Totten is suspected of signing someone else’s name as a countersignature on his paycheck. So here are a few follow-up questions:
Is this something he did regularly?
Did other union officials know it?
Have other union officials done the same?
Was this money to which he wasn’t entitled? (Surely he was entitled to his paycheck.)
To be sure, Totten, whose union is the Globe’s largest, shouldn’t have signed someone else’s name on a check, and it kind of sounds like he’s admitted that, according to the reports. But we still don’t know whether we’re talking about ill intent or just a seat-of-the-pants management style.
More on the charges against Boston Newspaper Guild president Dan Totten, whose union is the Boston Globe’s largest, from the Boston Herald and the Globe.
I would be very cautious about drawing any conclusions based on the sketchy information that’s come out so far. This could be serious. Or it could be factional warfare.
Friday was deadline day for bidders seeking to make an offer to buy the Boston Globe and the Worcester Telegram & Gazette from the New York Times Co. And it appears there’s not much to report.