Analyst: Times Co. may not sell Globe
Regional assets are important, investors told
After weeks of rumors that The New York Times Co. is trying to sell The Boston Globe, one financial analyst said she met this week with Times Co. executives and came away with a different impression. Despite the Globe's mounting financial losses, she wrote, the company appears committed to the Globe "long term."
"Management did not indicate the time frame needed to turn around the profitability of The Boston Globe and did highlight that this property has been hit much harder than some of its other properties due to its larger exposure to classified revenues," wrote Alexia Quadrani, an analyst at J.P. Morgan. "But it did make clear that it views the Globe and other New England assets as important to the company, so we don't expect an attempted divestiture anytime soon."
The research report, sent out to J.P. Morgan investors on Wednesday, comes six weeks after the Times Co. threatened to shut down New England's largest newspaper if its unions did not agree to $20 million in concessions. Some industry analysts have speculated that the cuts - which are now pending approval from the Globe's union members - were not only necessary to stem losses but were also a prelude to a sale.
Times Co. spokeswoman Catherine Mathis declined to comment yesterday. "It's our longstanding practice not to comment on rumors concerning potential acquisitions or divestitures," she said.
Lauren Rich Fine, director of research at ContentNext Media, cautioned that the Times Co., which bought the Globe for $1.1 billion in 1993, may still turn around and sell the paper - if the price is right.
"The analyst's interpretation could be correct. The analyst's interpretation could be incorrect," she said. "My sense is that The New York Times can't afford the losses in Boston and are probably going down the dual track of trying to eliminate losses and also pursuing the sale of the paper."
The Globe lost $50 million last year and is on pace to lose $85 million this year if deep cuts aren't made. And by cutting wages and eliminating lifetime job guarantees that some employees enjoy, the Times Co. has improved its chances of attracting someone to buy the Globe, many analysts have said.
Quadrani, after having "met with various members of The New York Times management team," according to her report, suggested that selling Boston's largest newspaper may not, in fact, be the company's intent. The Times Co., she wrote, "does appear committed to the property long term." Quadrani could not be reached for further comment yesterday.
Some industry analysts said they agree with her assessment despite the rumors of potential suitors, including Red Sox owner John Henry, who said he is not involved in any talks to acquire the Globe.
Ed Atorino, managing director of the New York-based Benchmark Co. and a media analyst, said he believes Quadrani is "reading the tea leaves right."
"That's a very fair statement of what this management believes at the present time," Atorino said.
Keith O'Brien can be reached at kobrien@globe.com. 
