New York Times will keep The Boston Globe
Oct 15th 2009 5:10AM
Updated Dec 4th 2009 4:49PM
The New York Times Company (NYT), which had planned to sell The Boston Globe, now says it will keep it. The Times had taken bids for the paper, including one from Platinum Equity, a group led by a former Globe executive and a member of the Globe's founding family, which has recently bought other media properties.
The Times says that the reason for keeping the Globe is that significant cost cuts at the paper have made it more financially viable. The Times paid $1.1 billion for the Boston paper in 1993 and some industry experts put its current value at $20 million.
Bids for The Globe may have been below an acceptable level, according to a report in The Times, but the story runs deeper than that. Gannett (GCI), the nation's largest newspaper chain, said its quarterly numbers were better than expected; Gannett's 52-week low is $1.85 and the stock now trades near the high end of the period's range at $13.48. Investors are beginning to believe that the expense cuts at many major papers are enough to keep them viable, especially as the recession ends and advertising sales begin to turn up.
The profit margins in the industry may never be spectacular again, but the demise of many more large papers has become much less likely.
Douglas A. McIntyre is an editor at 24/7 Wall St.