Boston Globe gets visits from two potential buyers
bySep 15th 2009 11:40AM
A former owner of The Boston Globe visited the newspaper recently. Stephen Taylor, whose great-grandfather started the newspaper, is looking to bring it back into the family. But he is facing competition from Platinum Equity, a private equity firm from Beverly Hills, California, which also visited the Globe offices within the past week, according to a report by the newspaper in question.
A third group, which is local, may withdraw from the bidding process. It is led by Jack Connors, a former ad executive, and Stephen Pagliuca, co-owner of the Boston Celtics. Pagliuca is thinking about a run for the now open U.S. Senate seat in Massachusetts. This group submitted the lowest bid.
Taylor and Platinum have each bid approximately $35 million for the Globe and the Worcester Telegram & Gazette. Both newspapers are currently owned by the New York Times Co. (NYT). As part of the transaction, each potential buyer has agreed to take on $59 million in the newspapers' pension liabilities.
On Monday, the team led by Taylor, who spent close to 20 years working for the Globe and left his post as executive vice president when the newspaper was sold, spent all day in meetings with the paper's management. Platinum conducted similar meetings on Thursday. Neither Platinum nor Goldman Sachs (GS), which was engaged by the Globe to solicit bids, have commented.
For Taylor, winning the race for the Globe could be a masterful play, as it would result in more than $1 billion in "found money." His family sold the newspaper to the New York Times Co. in 1993 for $1.1 billion – far more than his current bid. The bidding team he's brought to the potential purchase includes several familiar faces: William Huff, a former CFO of the Globe and president from 1997 to 2001; William Connolly, former Globe controller; Robert Murphy, former Globe head of technology and Richard Gair, who was the general manager of Boston.com through the end of 2008.
The final bids have to be submitted by the end of September.
The New York Times Co. claims that the Globe is in much better financial condition than it was even a few months ago. Raising the price of the newspaper and winning $20 million in wage and benefit concessions from the unions certainly helped, along with cuts to management compensation. Closing a printing plant in Billerica, Massachusetts saved the newspaper another $18 million. Times chairman Arthur Sulzberger Jr. says that the company's "hand is no longer being forced," but there's no question that the acquisition of the Globe can't be counted in the win column.
Trying to be upbeat, Sulzberger said in a company-wide e-mail that reader retention at both the New York Times and the Boston Globe were above 90 percent, calling this "enviable." This symbolizes the problems at the company: it considers a 10 percent loss of readership successful, rather than focusing on net new subscribers, revenue, profit or some other measure of genuine success.