The New York Times Co. sells Boston Globe to Red Sox owner for $70 million
The New York Times Company announced on Saturday morning that it has agreed to sell the Boston Globe and its New England properties to the owner of the Boston Red Sox for the rock bottom price of $70 million. The NYT originally purchased the newspaper properties in 1993 for $1.1 billion. Evercore Partners was brought in by the Times to manage the divestiture.
John W. Henry, principal owner of the Boston Red Sox, will now acquire the Boston Globe and its associated websites, the Worcester Telegram & Gazette and its websites, and GlobeDirect, the Globe’s direct mail marketing company.
”We are very proud of the association we have had with The Boston Globe and the Worcester Telegram & Gazette and we’re delighted to have found a buyer in John Henry, who has strong local roots and a deep appreciation of the importance of these publications to the Greater Boston community,” said Mark Thompson, president and CEO of The New York Times Company.
“The Boston Globe’s award-winning journalism as well as its rich history and tradition of excellence have established it as one of the most well respected media companies in the country,” Henry said.
Henry has owned the Red Sox since 2002, and the team has won two World Series championships since the acquisition.
(The Tribune Company had far less success with its ownership of the Cubs, and sold off the team to the Ricketts family in 2009. Now the Tribune Company is spinning off its newspapers and looking for a buyer.)
Having a partial ownership of the Red Sox proved a far wiser investment than owning the Globe outright. Last year the NYT sold its share in the club, realizing a net profit of $150 million. But its ownership of the Globe has proved to have been a bad deal.
But for Henry, ownership of the local newspaper, and at a bargain price, may proven worthwhile. Newspaper ownership, in many cases, is being justified in terms of marketing, promotion and political influence, rather than by the bottom line. In San Diego, developer Doug Manchester purchased the San Diego Union-Tribune, and both he and the Koch Brothers have been rumored to be interested in acquiring the Tribune’s papers which include the Los Angeles Times and Chicago Tribune.
As part of the deal, the NYT will live with $100 million in pension liabilities.
The Globe has been active in launching both mobile and tablet digital editions. Recently the paper launched a new iPhone app for its new paywalled website, while retaining two other iPhone apps tied to news – one for its free Boston.com website, and the other the universal ePaper replica edition app.
Its iPad edition is a replica that was not updated this morning, retaining the news that negotiations were still ongoing. With one story, the Globe’s digital team should learn that its ePaper strategy will not work with breaking news occurs. Readers this morning who subscribed to the ePaper edition will find they will have to go elsewhere to learn about the sale.