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Newspaper Economics: 2013
Did you catch the news last week that the Boston Globe is being sold? John Henry, the principal owner of the Boston Red Sox purchased the paper from the New York Times Company which had owned the Globe since 1993. Included in the sale were the websites boston.com and BostonGlobe.com as well as the Worcester Telegram & Gazette newspaper which the Times had purchased in 1999.
The numbers are interesting: the Times paid $1.1 billion for the Globe in 1993 and $295 million for the Telegram & Gazette in 1999. Henry is paying $70 million for the whole package. To put that in some kind of perspective, that’s like buying a house in 1993 for $110,000, putting a $30,000 addition on it in 1999 and then selling your $140,000 investment for $7,000 in 2013. Am I missing something?
Yes, you are missing something. :-) in addition to selling their $1.4 billion investment for $70 Million, the NY TImes Corporation is picking up the outstanding retirement obligation of $110 million.
Nevertheless, now with a local owner, who is somewhat civic minded and has deep pockets, should help the Globe survive while maintaining a respectable journalistic standard.
If I am remembering correctly the when the Times bought the Globe it came with some other assets. Those assets were sold off over the years diminishing the final value of the Globe. I think one of those assets were shares in the Red Sox.
It wasn’t until 2001 that the New York Times gained an ownership stake in the Red Sox. The NYT was part of the group led by John Henry that bought the Sox then. The Globe never directly owned the Sox; both a portion of the Sox and the Globe were owned by NYT which sold its share of the Sox in chunks over the past few years, the last portion being sold in May 2012. However, there were other assets included in the recent sale of the Globe and the Worcester paper to John Henry. The free tabloid Metro which is distributed to commuters was also part of the deal.