Private equity firm joins race for the Boston Globe
NEW YORK - A Californian private equity firm, Platinum Equity, has made a preliminary offer to buy the Boston Globe from the New York Times Company, which is also examining charing for online content at the New England paper.
Platinum Equity, which recently bought The San Diego Union-Tribune, becomes the third bidder looking to take the Boston Globe off of the New York Times Company's hands.
According to reports Platinum Equity, headed by Beverly Hills billionaire Tom Gores, has submitted a preliminary bid offering to pay $35m for the paper and assume $59m in pension liabilities. The firm is also reported to be a possible bidder for Business Week.
The entrance of Platinum Equity into the race is likely to dismay Boston Globe staff and the city of Boston who fear that the firm will slash costs and staff in a bid to make the paper, which is on course to lose $85m, a year profitable.
After the private equity firm bought the San Diego Union-Tribune Platinum in May it cut 192 staff, including 50 journalists, three days after completing the deal with more cuts expected. News pages have also been cut as have other sections of the paper.
Platinum Equity is competing to buy the Globe, and the smaller Worcester Telegram & Gazette, against two local groups of investors.
One is led by Stephen Taylor, whose family used to own the paper, and another by Stephen Pagliuca, of Bain Capital Partners, and Jack Connors, one of the co-founders of Boston advertising agency Hill Holiday.
The New York Times Company also confirmed that it had retained Goldman Sachs to handle any potential sale of the paper.
Elsewhere it was being reported by AP that the Boston Globe was considering a move to paid content and charging readers online.
"Nothing is absolute, but we are heading toward some sort of consumer pay model," for its Web site Boston.com, Globe spokesman Bob Powers said Friday.
Powers added that management of the newspaper believes readers will be prepared to make a financial contribution to receive online content. He said market research had been conducted over the past several months in an attempt to see "what consumers would be willing to pay, but weighing that against any potential loss of advertising".
Pay models being looked at include charging for verticals areas on the site such as sports or entertainment and giving some content away for free and then charging.
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