Paper's bidders may join forces
Members of three local groups considering bids for The Boston Globe could end up consolidating into a single team, according to two people involved in the possible purchase of the newspaper.
The investment bankers at Goldman Sachs controlling the auction want to maximize the number of potential bids they can deliver to the Globe's owner The New York Times Co. But as the process progresses, it's possible that two or more of these Boston players will join forces, the two people said.
The names of three Boston businessmen have surfaced as potential bidders: Boston Celtics co-owner and private equity executive Stephen Pagliuca; former advertising mogul Jack Connors; and Stephen Taylor, a former Globe executive and member of the family that sold the Globe to the Times Co. in 1993.
Each is leading his own group of potential investors.
These three groups and other potential bidders are waiting for a report from the Times Co. on the Globe's total liabilities before they can formulate offers, according to these people, who spoke on condition of anonymity because they were not authorized to discuss the bids. Until they learn the Globe's pension liabilities and other detailed financial information, they said, the bidders can't put a price on what they might be willing to pay for the paper.
The Times Co. declined to comment.
Estimates of the Globe sale price range from zero to $250 million - the upper end of that being "not sensible," according to the two people involved in potential bids.
The Times Co. paid $1.1 billion for the Globe back when the paper was considered a cash cow because of its dominance in classified advertising. The Globe, New England's largest daily, was profitable for many years, but as more readers and advertising migrated online, the paper began to lose revenue. Last year, the Globe lost $50 million; it's expected to lose money this year, as well.
People involved in the potential bidding said the Times Co. is looking for first-round bids to be delivered this month. The company wants to cull those bids for the most appealing and serious buyers. The Sulzberger family, which controls the Times Co., has indicated to potential bidders that they would prefer a buyer who wants to continue to operate the Globe as journalism outlet. But the Times Co. will face financial pressure from shareholders to reap the best possible price.
Some bidders who might emerge could look to acquire the Globe for its real estate assets, according to people involved in the bidding. Still others might form teams that split the company into parts: real estate, newspaper, and online.
Tom Fiedler, dean of Boston University's College of Communication and former executive editor of The Miami Herald, said such breakup artists would be looking for a "fire sale." Others may look to buy the paper for ego reasons, he said, while a third kind of buyer would be interested for civic reasons. "One would hope that those are people who have the best interests of the community and good journalism in mind," Fiedler said.
Some of the potential Globe bidders also are interested in buying the Times Co.'s 17.5 percent stake in the Red Sox. But that investment would be valued separately from the Globe and would have to be approved by Major League Baseball. The Times Co. paid $75 million for its stake in 2002, which could be worth roughly double that now, according to baseball investors.
The fate of the Red Sox piece would be heavily influenced by team owner John Henry. Henry, who recently met with Connors, according to people who know both men, said on Twitter last week: "I'm not buying a newspaper."
Beth Healy can be reached at bhealy@globe.com. 