New York Times Co puts Boston Globe up for sale

by Staff, Brand Republic 11-Jun-09, 08:05

NEW YORK - The New York Times Company is seeking bids for the loss making Boston Globe two days after journalists at the paper rejected a pay and benefit-cuts package.

The media company hired investment bank Goldman Sachs to seek bids for the possible sale of The Boston Globe, according to a report in the Globe which quotes two possible bidders.

Goldman Sachs, which is also selling the New York Times Company's 17.5% stake in the Boston Red Sox, has been speaking to potential bidders and telling them that bids would be accepted for the Boston Globe after June 8 regardless of the outcome of the Newspaper Guild vote on a $10m pay and benefit cut.

The Boston Globe quoted one of the unnamed buyers as saying: "The New York Times has indicated to interested buyers that once the June 8 vote had taken place, once everybody knew what was going to happen -- up or down -- they would expect bids a couple weeks later."

In a close vote on Monday night the Newspaper Guild voted down the $10m cuts demanded by the New York Times Co, which would have called for a 23% pay cut to editorial salaries.

The New York Times Co did not comment. Spokeswoman Catherine Mathis would only say that it was the group's "longstanding policy not to comment on rumours concerning potential acquisitions and divestitures".

Two months ago the New York Times Co threatened to close the Boston Globe, which lost $50m last year and is on course to lose $85m this year.

When it threatened closure, a sale was seen as another option and many familiar with the situation considered this as the company's ultimate goal.

The Boston Globe quoted two more unnamed individuals who are involved in potential bids. They told the paper that they do not expect bids to proceed until the situation with the union is resolved.

After the 23% pay cut was narrowly rejected the Newspaper Guild said it wanted to resume talks. However, the New York Times Co said it would implement the $10m cuts. The union has said it would fight those cuts in the courts.

The cuts were part of an overall $20m package that had been accepted by five trade unions at the Boston Globe -- including the truck drivers, represented by the Teamsters.

Two years ago Jack Welch, the former chief executive of General Electric, indicated he was interested in buying the paper and had discussed a plan with partners including Jack Connors, co-founder of the Boston advertising firm Hill Holiday, and Joseph O'Donnell, who works in theatre concessions.

Another bidder who emerged more recently is Boston Red Sox principal owner, John Henry.

He was reported to have indicated his willingness to buy the Boston Globe as part of a wider deal to buy The New York Times Co's stake in the Boston Red Sox.