Tag: John Henry

Swartz case leads Media Nation’s top 10 of 2013

Aaron Swartz speaking in 2012
Aaron Swartz speaking in 2012

Last January, not long after the young Internet genius Aaron Swartz committed suicide, civil-liberties lawyer Harvey Silverglate wrote powerfully about the abusive prosecutorial tactics that may have led to his death.

Swartz faced a lengthy federal prison sentence for downloading academic articles at MIT without authorization. Even though the publisher, JSTOR, declined to press charges, U.S. Attorney Carmen Ortiz brought a case agains Swartz under the Computer Fraud and Abuse Act. As Silverglate put it, the law is “a notoriously broad statute enacted by Congress seemingly to criminalize any use of a computer to do something that could be deemed bad.”

Silverglate’s article was republished in Media Nation with the permission of Massachusetts Lawyers Weekly, where it originally appeared. And it was far and away the most viewed article in Media Nation in 2013.

Today we present Media Nation’s top 10 posts for 2013, based on statistics compiled by WordPress.com. They represent a range of topics — from the vicissitudes of talk radio to a media conflict of interest, from Rolling Stone’s controversial cover image of accused Boston Marathon bomber Dzhokhar Tsarnaev to the sad, sudden death of The Boston Phoenix.

The top 10 is by no means representative of the year in media. Certainly the biggest story about journalism in 2013 involved the National Security Agency secrets revealed by Edward Snowden to The Guardian and The Washington Post — a story that did not make the cut at Media Nation.

Here, then, is our unrepresentative sample for the past 12 months.

1. Harvey Silverglate on the Aaron Swartz case (Jan. 24). Few people were more qualified to weigh in on U.S. Attorney Ortiz’s abusive tactics than Silverglate, my friend and occasional collaborator, who several years ago wrote “Three Felonies a Day,” a book on how the federal justice system has spun out of control. But Silverglate’s take wasn’t the only article about Swartz to generate interest in Media Nation. The aftermath of Swartz’s suicide also came in at No. 11 (“The Globe turns up the heat on Carmen Ortiz,” Jan. 11) and No. 13 (“Aaron Swartz, Carmen Ortiz and the meaning of justice,” Jan. 14). In a bit of poetic justice, a project Swartz was working on at the time of his death — software that allows whistleblowers to submit documents without being identified — was unveiled by The New Yorker just several months after his suicide.

2. The New Republic’s new owner crosses a line (Jan. 28). A little more than a year ago, the venerable New Republic was saved by Chris Hughes, a co-founder of Facebook who is using some of his fortune to restore the magazine to relevance and fiscal health. But he crossed an ethical line last January when he took part in an interview with President Obama, whose campaign he had worked on, and tossed a series of softball questions his way. At the time I wrote that Hughes was guilty of “no more than a minor misstep.” So how did it rise to No. 2? It turns out that a number of right-leaning websites picked up on it, bringing a considerable amount of traffic to Media Nation that I normally don’t receive.

3. Dailies go wild over sports controversies (Aug. 30). Four months after publishing this item, I find it hard to make heads or tails of what was going on. But essentially Globe-turned-Herald sportswriter Ron Borges contributed to a Rolling Stone article on the Aaron Hernandez murder case, which generated some tough criticism from both the Globe and the well-known blog Boston Sports Media Watch. That was followed almost immediately by a Globe article on the ratings collapse of sports radio station WEEI (AM 850), which brought yet more tough talk from, among others, ’EEI morning co-host Gerry Callahan, who also happens to write a column for the Herald. Yes, Boston is a small town.

4. Rolling Stone’s controversial cover (July 17). I thought it was brilliant. I still do. The accusion that Rolling Stone was trying to turn Dzhokhar Tsarnaev into some sort of pop-culture hero is absurd and offensive — and not borne out by the well-reported article that the cover was designed to illustrate.

5. Glenn Ordway walks the ratings plank (Feb. 14). Ordway built sports talker WEEI into a ratings monster only to see its numbers crater in the face of competition from the Sports Hub (WBZ-FM, 98.5). Ordway was by no means the problem with WEEI. But station management decided it could no longer afford his $500,000 contract, and so that was it for the Big O.

6. A big moment for The Boston Globe (Dec. 17). It was actually a big year for the Globe, from its riveting coverage of the marathon bombing and the standoff that led to the arrest of Dzhokhar Tsarnaev to the paper’s acquisition by Red Sox principal owner John Henry. But two days in mid-December were emblematic of the paper’s continuing excellence and relevance — a long, detailed exposé of the Tsarnaev family that revealed Dzhokhar, rather than his older brother, Tamerlan, may have been the driving force behind the bombing; an investigation into a case of alleged “medical child abuse” that pitted a Connecticut family against Children’s Hospital; and a nationally celebrated series of tweets by staff reporter Billy Baker about a Boston teenager from a poor family who had been admitted to Yale.

7. The Boston Phoenix reaches the end of the road (March 14). A stalwart of the alternative-weekly scene and my professional home from 1991 to 2005, the Phoenix was a voice of incalculable importance. But with even the legendary Village Voice struggling to survive, the alt-weekly moment may have passed. At the time of its death, the Phoenix had more than 100,000 readers — but little revenue, as advertising had dried up and both the print edition and the website were free. I scribbled a few preliminary thoughts in this post, and later wrote something more coherent for PBS MediaShift.

8. The return of Jim Braude and Margery Eagan (Feb. 6). Eagan and Braude’s morning show was the one bright spot on WTKK Radio, an otherwise run-of-the-mill right-wing talk station that had been taken off the air a month earlier. So it was good news indeed when the pair was hired to host “Boston Public Radio” from noon to 2 p.m. on public station WGBH (89.7 FM). (Note: (I am a paid contributor to WGBH-TV’s “Beat the Press,” where Eagan is a frequent panelist.)

9. Joe Scarborough grapples with history — and loses (Feb. 17). Asking cable blowhard Scarborough to write a review for The New York Times Book Review about the relationship between Dwight Eisenhower and Richard Nixon could have been a smart, counterintuitive move. But it only works if the writer in question is, you know, smart.

10. The bell tolls for WTKK Radio (Jan. 3). As I already mentioned, Jim Braude and Margery Eagan were able to walk away from the rubble of WTKK, which was shut down by corporate owner Greater Media and turned into an urban music station. Just a few years earlier the station had been a ratings success with trash-talking hosts like Jay Severin and Michael Graham. But tastes change — sometimes for the better.

Photo (cc) by Maria Jesus V and published under a Creative Commons license. Some rights reserved.

BBJ: Henry is close to selling Worcester paper

The indispensable Boston Business Journal reports that John Henry may be close to selling the Telegram & Gazette of Worcester, the “other” newspaper he acquired when he purchased The Boston Globe.

Craig Douglas writes that the T&G may end up in the hands of GateHouse Media, which recently implemented cuts at its two newest Massachusetts properties, the Cape Cod Times and The Standard-Times of New Bedford.

I’d like to think that Henry would sell to local owners if he could find any. The T&G may be a tough acquisition at this point, and GateHouse may be among the few prospective buyers willing to take it on.

My hope is that GateHouse, which is going through a structured bankruptcy aimed at getting $1.2 billion in debt off its back, will prove to be a better steward of the T&G than we’ve come to expect.

GateHouse’s recent move at its weekly papers in Massachusetts — reallocating resources from weaker to stronger papers rather than engaging in out-and-out cuts — offers some reason for optimism.

Update: Henry has what sounds like good news, according to the T&G — no sale before 2014, plus he’s hoping for a local buyer.

The challenge of counting digital subscribers

UnknownHow many digital subscriptions has The Boston Globe sold? According to Globe spokeswoman Ellen Clegg, there were 45,971 “digital-only subscribers” in September — an increase of nearly 80 percent over the 25,557 who had signed up a year earlier.

That sounds impressive. But it’s a pittance compared to the numbers compiled by the Alliance for Audited Media (AAM), which recently released a report claiming the Globe had an average of 86,566 digital readers for its Monday-through-Friday editions for the six-month period ending Sept. 30.

The difference is in how you count digital subscriptions. I’ve written about this before, but the AAM’s methodology is becoming increasingly controversial, as some readers are being double- or even triple-counted.

Here’s how it works. As Clegg says, the number reported by the Globe represents only customers who have signed up for paid online access through the BostonGlobe.com website, the iPhone app, the ePaper replica edition or an edition for e-readers like the Kindle.

If anything, that methodology undercounts digital readership. For instance, we pay for home delivery of the Sunday paper, which entitles us to digital access at no extra charge — and that’s how we read the Globe Monday through Saturday. Yet according to Clegg, because we have not specifically purchased a digital edition we are counted as Sunday-only print subscribers.

By contrast, under the AAM methodology you could sign up for seven-day home delivery of the print edition — and if you also regularly log on to BostonGlobe.com at work, you’d count as a digital subscriber as well. If you download and use the Globe iPhone app to check the headlines while waiting for the subway, well, there’s a good chance you’ll be counted again. Joshua Benton of the Nieman Journalism Lab recently broke it down:

AAM wrote a blog post in May explaining that a paying print subscriber at a paywalled newspaper can actually count as two “subscriptions” if publishers provide proof that the subscriber activated their username and password for digital. And there’s no reason to stop at two: “each digital platform,” like an iPhone app, can count as its own sub too.

And in a considerable understatement, Poynter’s Andrew Beaujon — noting that the AAM methodology allowed USA Today to claim a 67 percent increase in paid circulation — wrote that “the new figures make many comparisons challenging.”

The good news for the Globe is that paid circulation more or less held its own during past year even if you use the paper’s own understated figures. From September 2012 to September 2013, print circulation of the Monday-through-Friday edition fell from 180,919 to 166,807, according to the AAM. On Sundays it fell from 323,345 to 297,493.

But when you factor in  digital-only subscriptions, the Globe had a paid Monday-through-Friday circulation of 212,778 this September, up from 206,476 a year ago — an increase of 3 percent. On Sundays, total paid circulation declined from 348,902 to 343,464, or about 1.5 percent.

The picture looks considerably brighter if you use the AAM’s figures. By those measures, Monday-through-Friday paid circulation at the Globe rose from 230,351 to 253,373, an increase of about 10 percent. Sunday circulation rose from 372,541 to 384,931, or 3.3 percent.

What is the most accurate measure? The AAM figures may be exaggerated, but it’s also clear that the Globe’s measurements undercount paid subscribers — especially Sunday-only print customers who read the paper online during the rest of the week.

My best estimate is that paid circulation at the Globe is stable or growing slightly. And though digital advertising is not nearly as lucrative as its print counterpart, the far lower costs of digital publishing should help John Henry and company offset the loss in ad revenue.

Certainly Boston Herald publisher Pat Purcell must be looking closely at the Globe’s strategy. According to the AAM, paid circulation of the Monday-through-Friday Herald dropped by 9 percent, to 88,052, over the past year. The Sunday edition fell by 7.5 percent, to 71,918.

Four takeaways from new owner John Henry’s message to readers of The Boston Globe

John Henry at celebration of the Red Sox' 2007 World Series victory.
John Henry in October 2007

This article was published earlier in the Nieman Journalism Lab and The Huffington Post.

John Henry’s nearly 2,900-word message to readers of The Boston Globe could have been little more than an exercise in public relations, standing up for what is good and deploring what is bad.

There’s a lot of that, of course. We’re only into the second paragraph before he dutifully informs us that the Globe “is the eyes and ears of the region in some ways, the heartbeat in many others.” But Henry, a billionaire financier who is the principal owner of the Boston Red Sox, is also unexpectedly revealing about himself and how he intends to run the Globe. (Henry purchased the Globe, its BostonGlobe.com and Boston.com websites, the Telegram & Gazette of Worcester and several smaller properties from the New York Times Co. for $70 million. The sale, announced in August, closed last week following a brief delay over a labor dispute at the T&G. Henry also made a bit of news when folks at the T&G noticed that his message omitted Worcester entirely.)

Henry’s piece, headlined “Why I bought the Globe,” takes up a full page in the Opinion section of Sunday’s paper. It’s teased on the front page as well. He writes about his life, the Red Sox, the financially struggling news business and what he thinks needs to be done to set it on a sustainable path. Here are what I think are the most important takeaways.

1. He plans to be an activist owner. Just the atmospherics of the essay itself are a pretty strong indication that Henry does not see this as a passive investment. He wants to be the face of the Globe.

To counter his image as a reserved, slightly eccentric rich guy who dabbles in sports, Henry goes into some detail about his involvement in the civil-rights movement and his subsequent retreat “into what most of my friends thought was my primary talent at the time — writing and performing rock music.”

Somewhere along the way he made a lot of money, but he writes about that only briefly. Instead, he describes his stewardship of the Red Sox as a possible model for what he intends to do with the Globe:

When we acquired the Red Sox, profit was literally at the bottom of our list of goals. We were determined to do whatever it took to win.

Now I see The Boston Globe and all that it represents as another great Boston institution that is worth fighting for.

Here’s another intriguing example of what sort of profile Henry intends for himself as the Globe’s owner: Recently the Boston Business Journal reported that toxic waste at the Globe’s Dorchester property could complicate any plans Henry might have to develop the site and move the paper to a cheaper location. Henry used his Twitter feed to dispute the BBJ’s story and slam an earlier piece about the Globe’s break-up with a classified-ad site called Cars.com:

A feisty newspaper owner who fights back in public? Bring it on. That’s certainly an improvement over the gray management style of the Times Co.

2. He’s looking for advice in all the right places. If the Globe and other large regional dailies are going to survive and prosper, they need to develop new ways of doing business. So it’s encouraging that Henry mentions alliances the paper already has with Harvard’s Shorenstein Center, the MIT Media Lab and the Nieman Journalism Lab.

Henry also gives a shout-out to Clay Shirky, which I take as a signal that Henry is reading and talking to the right people. It doesn’t sound like he intends to take the approach adopted by Aaron Kushner, a one-time Globe suitor who’s winning plaudits for trying to revive the Orange County Register by focusing on the print edition. The Globe has been a leader in digital journalism. So it’s good news that Henry sounds like he’s going to double down on innovation.

3. He has some retro ideas about paid content. Near the top of his commentary, Henry repeats an old trope, writing that newspapers have been losing money because “Readers were flocking from the papers to the Internet, consuming expensive journalism for free.”

Now, I’ve got nothing against charging for digital subscriptions, and the Globe has had some success with that — 39,000 at last count. But it’s important to keep in mind what newspaper owners are up against in asking readers to pay for online access.

As has often been said, newspaper readers never paid for the news — they paid for the expense of printing and delivering the paper, with advertisers picking up the rest. These days, readers are paying — a lot — for their own printing presses (computers, tablets and smartphones) and their own delivery (broadband and cellular access). It’s perfectly understandable that they don’t want to pay more.

What went wrong was not that newspapers started giving away their content but, rather, that the advertising model collapsed, especially from classifieds. Henry understands this, writing, “I feel strongly that newspapers and their news sites are going to rely upon the support of subscribers to a large extent in order to provide what readers want.”

I wish any newspaper owner well in persuading readers to pay for journalism. But we have to understand that we are asking them to do something they’ve never done before: pay for news in addition to paying for printing and delivery. We need to be humble about how much we’re asking of our audience.

4. He wants the Globe to act as a guide to the larger conversation. One of the most important roles professional journalism can play is to aggregate and curate the torrent of information — not just when big news breaks, but on a daily basis.

The New York Times does this with The Lede; the Globe does it from time to time, as it did following the Boston Marathon bombing. The idea is to become the go-to place for trustworthy links to other news sources, blogs and citizen media. Henry clearly gets that, writing:

We will provide what we will call the Globe Standard when it comes to curated links that will ensure our readers do not waste their time when they click on news, reviews, writers, columnists, ecommerce, events, opportunities, and social engagement from any of our platforms.

One thing Henry gets absolutely right is that the newspaper business is not now and never was compatible with ownership by publicly traded corporations and the quarterly demands of Wall Street. For more than a generation, corporate chains slashed newsrooms, first to drive up profit margins, later to stave off mounting losses. The debt they took on to build their chains is one of the prime reasons for their inability to set themselves on a new path. Henry understands that.

“I soon realized that one of the key things the paper needed in order to prosper was private, local ownership, passionate about its mission,” Henry writes. Farther down, he adds: “But this investment isn’t about profit at all. It’s about sustainability. Any great paper, the Globe included, must generate enough revenue to support its vital mission.”

Leaving aside the obvious fact that profit is a key to sustainability, Henry articulates a vision in which journalism comes first — which is another way of saying the customer comes first. Too many newspaper owners have forgotten that.

Photo (cc) by Patrick Mannion and published under a Creative Commons license. Some rights reserved.

Why John Henry should dump Times content

Screen Shot 2013-10-25 at 2.07.20 PMThe New York Times Co. no longer owns The Boston Globe. Now is the moment for new owner John Henry to take the next step: stop running Times content in his paper.

I’m suggesting this not because I dislike the Times. Rather, I’m suggesting it because the Globe’s best, most engaged readers are those who are most likely to read the Times, too. There’s nothing quite like reading the Globe and coming across a shortened Times story on a national or international event to make you feel like you’re reading Times Lite.

For example: The story above, by New York Times reporter Robert Pear, takes up about 750 words at the top of page A2 in today’s Globe — and 1,170 words on page A18 of the Times.

For many years — even for the first decade or so of Times Co. ownership — the Globe never ran Times articles. Instead, the Globe supplemented its own coverage with journalism from wire services and from newspapers such as The Washington Post and the Los Angeles Times.

Somewhere along the line, though, someone at the Mother Ship decided the Times Co. could save money by running Times articles in the Globe. It’s hard to argue with the math — no matter how they did the accounting, it was essentially free content.

I don’t know how many people subscribe to both the Times and the Globe. The number may be very small. But those double subscribers tend to be journalists, community leaders and opinion makers — the very people Henry needs to court as he embarks on his new career as a newspaper owner.

Dumping the Times would serve as an emphatic statement that he intends to chart a new, independent course for the Globe.

Globe publisher calls BBJ report “misleading”

Boston Globe publisher Christopher Mayer is disputing a report that toxic contamination at the paper’s 16-acre Dorchester property could interfere with any plans incoming owner John Henry might have to move the Globe and redevelop the land.

In an internal message to Globe employees that I obtained, Mayer refers to the story as “misleading,” and says the contamination will not be an obstacle to redevelopment.

Craig Douglas of the Boston Business Journal wrote on Tuesday that pollution from underground diesel tanks, first discovered in 1996, has led the Massachusetts Department of Environmental Protection to ban “any work or potential development that might disturb sections of chemical-soaked soil in their present state.” [Note: Douglas responds below.]

The $70 million purchase of the Globe has already been delayed by a labor dispute at the Telegram & Gazette of Worcester, which, like the Globe, is being sold to Henry by the New York Times Co.

Douglas’ story makes it clear that the such problems are not unusual in urban areas, and that the typical solution is rehabilitation and reuse. But he notes that such efforts can run into the tens of millions of dollars depending on the seriousness of the contamination.

Douglas reports that the Globe and the New York Times Co. declined to comment and that Henry could not be reached.

Mayer’s message to employees refers to “reports,” but the news was broken by the BBJ. For instance, this article in Go Local Worcester, posted on Wednesday, credits the BBJ.

I have emailed Douglas for a response to Mayer’s message.

The full text of Mayer’s message follows.

Dear Colleagues,

I would like to address recent press reports concerning environmental conditions at The Globe’s headquarters on Morrissey Boulevard that raised questions about the safety of two areas of the property.

These reports are misleading. The conditions referred to are nearly two decades old and measures taken at that time addressed the issues that were identified.

Like any property holder with industrial activity conducted on its site over several decades, The Globe has, on occasion, needed to address environmental conditions. Development on the site is governed by health and safety rules and regulations, but it is not prohibited or banned.

Indeed, during the sales process, and prompted by requests from potential buyers (including John Henry), The Globe conducted an updated environmental assessment that did not identify any environmental conditions that warranted further review.

Chris

Christopher M. Mayer
Publisher, The Boston Globe
President, New England Media Group

Update. Craig Douglas responds: “As your blog suggests, there is nothing misleading in our story. The environmental reports we cited speak for themselves, making it clear there are certain activities and uses that are prohibited on the Globe’s property in its current state. We never claim or infer, as the Globe’s publisher suggests, that those problems can’t be remediated or that the Globe employees are exposed in any way to health risks.”

Update II. It’s official: John Henry is now the owner of The Boston Globe, the Telegram & Gazette, Boston.com and several smaller properties. (6:41 p.m.)

Update III. I missed this earlier, but I thought it was worth flagging as a sign of how Henry might respond to negative news coverage. (Saturday.)

 

A new book, and an event for “The Wired City”

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I wasn’t ready to announce this, but Mark Shanahan of The Boston Globe beat me to it. My next book will be about a new era of newspaper owners and how they are going about remaking their struggling businesses.

The book will focus on Amazon.com founder Jeff Bezos, who is in the process of buying The Washington Post; Red Sox principal owner John Henry, who’ll soon add the Globe to his holdings; and Aaron Kushner, a businessman who tried to buy the Globe and then Maine’s Portland Press Herald before reeling in the Orange County Register. It’s a logical next step in my research into new ways of paying for journalism.

The idea grew out of conversations with Steve Hull, an acquisitions editor at University Press of New England. We’d been trying to do business together for a couple of years, pitching possible projects back and forth. There’s no contract at the moment, but I expect to write the book for a yet-to-be-named new trade division of UPNE. No, I won’t tell you the working title, and I expect it will change long before the publication date — probably sometime in 2016.

Meanwhile, I still have a current book to flog. I’ve got a few events coming up for “The Wired City” in the next month, including one at the Boston law firm of Prince Lobel this Thursday at 5:30 p.m. It’s free, and you can RSVP here. Cosponsors are the New England First Amendment Coalition and the New England chapter of the Society of Professional Journalists.

“The Wired City” was published by University of Massachusetts Press, an academic publisher I would recommend to anyone. I’ve had a great relationship with acquisitions editor Brian Halley, publicist Karen Fisk and company, and I can’t say enough good things about them.

Photo (cc) by Esther Vargas and published under a Creative Commons license. Some rights reserved.

BBJ scores big on two local media stories

The Boston Business Journal has come up aces during the past week with two meaty stories on local media news.

• A shaky future at the Globe. The first, published last Friday, found that confidential financial documents put together by the New York Times Co. suggest The Boston Globe was in slightly worse shape than outside observers might have imagined when the paper and several affiliated properties were sold to Red Sox principal owner John Henry for $70 million in early August. The BBJ’s Craig Douglas writes (sub. req.):

In essence, Henry is buying into a borderline breakeven enterprise already teed up for $35 million in cost cuts over a two-year period before he even walks through the door.

How bad is it? According to the documents cited by Douglas, advertising revenue at the New England Media Group (NEMG) — mainly the Globe, the Telegram & Gazette of Worcester and Boston.com — is expected to be 31 percent below the 2009 level next year. And paid print circulation revenue continues to slip despite price increases at the Globe and the T&G.

You may have heard people say at the time of the sale that Boston.com was worth more than the Globe itself. Well, I don’t think you’ve heard me say it. Print advertising remains far more valuable than online, and that holds true at NEMG as well. Douglas writes:

The Globe is by far the biggest revenue generator of the group, accounting for 69 percent, or about $255 million, of its forecasted revenue this year. The Telegram & Gazette in Worcester is next in line at $42.5 million in forecasted revenue this year, while Boston.com is on track to book about $40 million.

Print products account for about 88 percent of NEMG’s total annual revenue. That heavy reliance on print-related advertising and circulation revenue has proven particularly problematic of late, as both categories have lost ground since 2009 and are forecasted to see continued deterioration for the foreseeable future.

Douglas’ story is protected behind a paywall, but if you can find a print edition, you should. Suffice it to say that John Henry has his work cut out for him. The picture Douglas paints is not catastrophic. But it does show that the Globe is not quite as far along the road toward figuring out the digital future as some of us might have hoped.

• Tough times ahead for local papers. The other big media splash, which I linked to last night, is Jon Chesto’s analysis of the sale of Rupert Murdoch’s Dow Jones Local Newspaper Group (formerly Ottaway Newspapers) to an investment firm affiliated with GateHouse Media. The papers sold include three prominent Greater Boston dailies: The Standard-Times of New Bedford, the Cape Cod Times and the Portsmouth Herald, on the New Hampshire seacoast.

Chesto’s article is part of the BBJ’s free offerings, so by all means read the whole thing. It’s a real eye-opener, as he explains as best anyone can at this early stage what the sale and simultaneous bankruptcy of GateHouse will mean for local papers and the communities they serve. Unfortunately, indications are the news will be very bad indeed.

Fairport, N.Y.-based GateHouse, which publishes about 100 local papers in Eastern Massachusetts (including The Patriot Ledger of Quincy, The Enterprise of Brockton and The MetroWest Daily News of Framingham), will somehow be combined with the entity that holds the former Ottaway papers into a new company with the uninspired name of New Media (that may change). (Update: Chesto is a former business editor of The Patriot Ledger, which no doubt helped him write his piece with a real air of authority. And thanks to Roy Harris for reminding me of that.)

The deal with Murdoch — at $82 million, quite a bit more than I had anticipated — was done through Newcastle Investment Corp., a real estate investment trust that is part of Fortress Investment Group, which in turn is GateHouse’s principal backer.

The powers-that-be are already talking about slashing the Ottaway papers, which are among the best local dailies in the region. Chesto writes:

The papers are described as “under-managed by News Corp.” with “expense reductions of only 6% since 2010.” Translation: We can take more out of the expenses than News Corp. did. GateHouse has been an aggressive cost cutter in recent years, most notably with efforts to consolidate most of its page design and layout functions. That work was centralized in two locations, including an office in Framingham. But it will soon be downsized further, into one location in Austin, Texas.

Yes, Murdoch, the “genocidal tyrant,” is likely to prove a better steward of local journalism than the people he’s selling to.

Post-bankruptcy, with $1.2 billion in debt off their backs, the executives now running GateHouse are going to be empowered. According to a presentation put together for investors, Chesto writes, New Media may spend $1 billion to buy up local media companies over the next three years.

Chesto doesn’t say so, but if I were working for the Eagle-Tribune papers north of Boston (The Eagle-Tribune of North Andover, The Daily News of Newburyport, The Salem News and the Gloucester Daily Times), I’d be polishing that résumé right now. On the other hand, those papers have already been cut so much under the Alabama-based CNHI chain that it’s not like a new owner could do a whole lot worse.

At a time when there are reasons to be hopeful about the newspaper business thanks to the interest of people like John Henry, Jeff Bezos and Warren Buffett, the GateHouse deal shows that there are still plenty of reasons to be worried about the future.

A moment of optimism for the future of journalism

In just four days, a major metropolitan newspaper (The Boston Globe) and, now, a national newspaper (The Washington Post) have been sold to wealthy new owners with good-guy reputations who’ll be able to operate debt-free while they try to figure out how to turn around the fortunes of their beleaguered acquisitions.

John Henry’s buying the Globe is one thing. Jeff Bezos’ purchase of the Post is quite another. Post-Steve Jobs, is there a more visionary tech entrepreneur than the founder of Amazon? This is great and hopeful news for anyone concerned about the future not just of the newspaper business but of journalism.

 

“Papa Doug” minion squawks over Globe sale

A real bump in the road? Or just the Herald being the Herald when it comes to all things related to The Boston Globe?

Chris Cassidy reports in the Boston Herald that the group headed by Douglas Manchester, the right-wing businessman who owns the paper formerly known as the San Diego Union-Tribune, is squawking because its executives believe they offered more money for the Globe than Red Sox principal owner John Henry. Cassidy quotes John Lynch, the chief executive of U-T San Diego:

We bid significantly more than Henry. At the end of the day, I’m certain our bid was higher and could have been a lot more higher if they had just asked. I’m just stunned. I thought this was a public company that had a fiduciary duty to get the most by its stockholders…. From the beginning, I don’t think they wanted to sell to us.

Cassidy writes that the allegations “could delay the deal and leave the New York Times Co. open to shareholder backlash.”

Could they? No doubt we’ll learn more in the days ahead. One thing working in favor of the deal is that the Times Co. has two classes of stockholders, with the voting shares firmly under the control of the Sulzberger family and its allies. But that doesn’t mean the Sulzbergers are legally allowed to leave money on the table.

Last February, Boston Globe reporter Beth Healy wrote an article in which Times Co. vice chairman Michael Golden made comments that could be construed as at least somewhat contradictory. Here is how she began:

New York Times Co. vice chairman Michael Golden told Boston Globe employees Friday that the company has a duty to seek the highest bidder in a sale but aims to leave the newspaper in responsible hands.

“We have no intention to send the New England Media Group to the slaughterhouse,” he said in one of three town-hall style meetings with employees.

One way of interpreting that is that the Times Co. would select the highest qualified bidder — language often invoked so that (for example) a city council isn’t legally bound to award the trash-hauling contract to the low bidder if it turns out that he plans to burn it all in his backyard. Or that the Times Co. would be required to sell to the likes of “Papa Doug” Manchester.

In today’s Globe, Healy reports that, ultimately, what fueled the Henry bid was a lot of green, which may be what prevents the Manchester group’s complaints from rising to the level of seriousness. She writes:

His [Henry’s] was not the highest bid for the Globe, according to people involved in the process. But his offer was appealing to the Times Co. because it was cash, unencumbered by financing issues or a bevy of investment partners. One executive working for the Times Co. said the key was who was best able to get the financing together and close the deal relatively quickly.

It sounds like Times Co. chairman Arthur Sulzberger Jr., if pressed, will be able to make the case that he sold not just to the buyer most likely to preserve the Globe, but also to the one who was the best prepared to sit down and write a check. Money talks.