Wednesday, August 7, 2013

Old Gray Lady Takes A Bath: New York Times Sells Boston Globe to Red Sox Owner John Henry

Business and Red Sox principal owner John Henry has entered into an agreement to buy New England's largest newspaper from the New York Times[NYSE: NYT] for $70 million.

The impending purchase from The New York Times Co. marks Henry's "first foray into the financially unsettled world of the news media," the Globe said Saturday. The deal will give Henry the 141-year-old newspaper, its websites and affiliated companies, it said.

The Times announced in February it was putting the Globe and related assets up for sale four years after calling off a previous attempt to sell it. The company's CEO said at the time selling the Globe would help the company focus attention on The New York Times brand.

Times spokeswoman Eileen Murphy confirmed the planned sale of the Globe and other media properties to Henry.

The Times said the all-cash sale, expected to close in 30 to 60 days, includes,, The Worcester Telegram & Gazette,, the direct mail marketing company Globe Direct and the company's 49 percent interest in Metro Boston, a free daily newspaper for commuters.

The New York Times purchased the newspaper from the family of Globe co-founder Charles Taylor in 1993 for a total of $1 billion- effectively making New England's largest daily newspaper a wholly owned subsidiary of the Times. The sale to Henry represents a loss of approximately $930 million.

Other potential suitors included western Massachusetts TV station owner John Gormally, Los Angeles-based private equity group Revolution Capital and Phoenix, AZ-based Najafi Cos., which also owns the NBA's Phoenix Suns.

Readership and subscriptions had been flagging in recent years- to the point where the Times threatened to shut down the newspaper in 2009 after the unions representing the paper vetoed $10 million in pay cuts. However, the publication won praise for their in-depth coverage of the April 15th Boston Marathon bombings and the manhunt that led to the death of Tamerlan Tsarnaev and capture of his younger brother Dzhokhar Tsarnaev in Watertown, MA.

Perhaps the best known Globe alumni is Hall of Fame baseball writer and frequent ESPN guest Peter Gammons. The sale of the Globe to Henry has also raised conflict-of-interest concerns over sports coverage- although coverage of the team by most New England media outlets has been mostly positive since Herny's group acquired primary ownership of the Red Sox in 2002.

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