The New York Times Co. (NYT) has reportedly hired Goldman Sachs Group Inc. (GS) to oversee a possible sale of the cash-strapped Boston Globe, New England's largest daily.
The report of the possible sale comes a day after the paper's largest union rejected proposed cuts in wages and benefits by The New York Times Co., which purchased the Globe in a $1.1 billion acquisition in the early 1990s. The Times Co. now is looking to wash its hands of the paper, which has been a drag on the earnings of the New York-based publisher for years. Bids are due in the next couple of weeks, according to a story in the Globe. Goldman also is handling the sale of the company's 17.5 percent stake in the Boston Red Sox.
"In recent weeks, Goldman Sachs representatives have told interested parties that the Times Co. would begin accepting bids for the Globe after June 8, no matter which way the Boston Newspaper Guild, the Globe's largest union, voted on $10 million in pay and benefit cuts demanded by the company," the Globe said.
Who would want the paper is another question. A few years ago, former General Electric Co. (GE) CEO Jack Welch reportedly was interested in buying the paper. But even the most civic-minded of billionaires would want a return justifying his investments, and that may be hard to get from the Globe.
Members of the Newspaper Guild narrowly rejected a $10 million package of wage and benefit concessions and the elimination of some lifetime job guarantees for Guild employees. Times Co. management is going to carry through with its threatened 23 percent wage reductions. The union has filed a complaint against the publisher with the National Labor Relations Board, something that may be difficult to win.
"They can plan their own funeral I suppose," said Tom Fiedler, dean of Boston University's College of Communication, in an interview with DailyFinance. "The clock is running against them. These kind of decisions don't go through the courts quickly."
The vote by the Guild underscores the long-simmering tensions between labor and management at the 137-year-old newspaper. The New York Times Co. estimates that the Globe, long considered one of the best in the U.S., will lose $85 million this year, greater than the $50 million it lost this year.
Even though the paper is hemorrhaging money, Fiedler said he was astonished that "anger overwhelmed their common sense here. A no vote by the Guild is the equivalent of scuttling their own ship."
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