New York Times selling Boston Globe
The New York Times Co. is putting The Boston Globe and its related assets up for sale four years after it called off a previous attempt to sell the newspaper.
In a statement issued Wednesday, Mark Thompson, the Times's chief executive, said a sale would be in the best long-term interests of both properties "given the differences between these businesses and The New York Times."
Thompson said the sale would help the company concentrate its attention and investments on The New York Times brand.
The newspapers' differences are stark. The Times has a national — even international — audience and has been adding digital subscribers at a rapid clip. Last year, it launched a Chinese-language website and has a loyal, growing subscriber base in the U.S.
The Globe is focused on its readers in the New England region, and while its digital subscriptions have been increasing, analysts believe they aren't rising fast enough to be meaningful. The Globe had 28,000 digital subscribers at the end of 2012, up eight per cent from three months earlier.
In comparison, the Times and International Herald Tribune had 640,000 paying subscribers online, up 13 per cent over three months.
Analyst John Janedis of UBS said in a research note that the sale has been expected for years and "will allow NYT to focus on the core brand as it attempts to further build out its digital platform."
He estimated that the Globe earned about $37.5 million in profits before interest, taxes, depreciation and amortization on $375 million in revenue. Janedis said the sale could bring in $150 million to $175 million, not including pension liabilities or the value of the Globe's headquarters.
Along with the Globe, the Times plans to sell the Worcester Telegram & Gazette; the publications' related websites; the Globe's direct mail marketing company, GlobeDirect; and a 49 per cent interest in Metro Boston, a free daily newspaper for commuters.
Led by Chairman Arthur Sulzberger Jr., the Times Co. is controlled by a family trust whose trustees are the descendants of Adolph Ochs, who bought the newspaper in 1896. The trust holds 90 per cent of the non-traded Class B stock that is required to elect the majority of the board.
The Times bought the Globe in 1993 for $1.1 billion from the family of Stephen Taylor, a former Globe executive. But the newspaper has faced difficulties in recent years as advertisers cut spending on newspapers and moved more ads online.
Analyst Edward Atorino with The Benchmark Co. said he views the sale as part of a strategy by the Ochs-Sulzberger family that controls the Times Co. to delist as a public company and go private.
"They're selling everything not nailed down," Atorino said. "The family will simply take the Times private. That's the only logical end game."
The Times Co.'s stock has fallen precipitously in recent years from above $50 US in 2002 to around $4 during the depths of the recession in 2009. Since then, the stock has recovered somewhat, closing down 4 cents at $9.03 on Wednesday.