Times Co. will take bids to sell Boston Globe
BOSTON -- The New York Times Co. appears interested in getting rid of The Boston Globe, hiring investment bank Goldman Sachs to manage a potential sale of a newspaper that has plummeted in value since its purchase in 1993, the Globe reported Wednesday.
The Globe, citing two potential buyers it did not name, said Goldman Sachs would request bids for the 137-year-old newspaper in the next couple of weeks. The Times Co. previously announced it had hired the investment bank to sell its 17.5% stake in the Boston Red Sox and related sports properties.
A Globe spokesman declined comment Wednesday, and a Times Co. spokeswoman said the company does not comment "on rumors concerning potential acquisitions or divestitures."
The Times Co. recently renegotiated contracts with most of the Globe unions, saying it needed $20 million in annual savings and the elimination of lifetime job guarantees, or it could be forced to close the newspaper.
The Globe has been dramatically affected by the recession, the advertising downturn and the migration of readers online, with $50 million in operating losses in 2008 and a projected $85 million loss this year. Its average weekday circulation dropped nearly 14% to 302,638 compared with the previous year, while Sunday circulation was down more than 11% at 466,665.
The Globe's largest union, the Boston Newspaper Guild, voted Monday to reject a contract proposal with $10 million in annual pay and benefit cuts. It filed an unfair labor complaint with the National Labor Relations Board on Tuesday after theTimes Co. immediately imposed a 23% pay cut to achieve the $10 million in annual savings.
Times Co. Chairman Arthur Sulzberger Jr., responding to a letter from Globe reporters asking for his intervention in the contract dispute, said Wednesday the company was forced to cut wages after the Guild rejected the contract offer.
"Without that, the Globe will be unable to effectuate the savings already ratified by its other unions, in which case it simply cannot survive," he wrote. "We cannot allow that to happen, so we, regrettably, will implement the wage reduction."
