Times Co. isn't selling Globe, Taylor discusses failed bid
By Beth Healy, Globe staff
The New York Times Co. said it has decided not to sell The Boston Globe, saying the paper’s financial performance had “significantly improved” in recent months.
The company had been exploring a sale of New England’s largest newspaper and had received two bids to buy the Globe and the Worcester Telegram & Gazette, which it also owns. The Times Co. said it is continuing to assess "strategic alternatives" for the Worcester paper.
Times Co. executives had said they may not sell the Globe -- and the swift decision to take the paper off the market less than a week after bids were due -- may reflect that the offers were too low. It was unknown what the final bids were but in a preliminary round each suitor offered about $35 million for the Globe and the T&G, plus the assumption of $59 million in pension liabilities. The Times Co. had purchased the Globe for $1.1 billion in 1993, and the T&G for $296 million in 2000.
In a memo sent to employees at 5 p.m. today, Times Co. chairman Arthur O. Sulzberger Jr. and chief executive Janet Robinson said the Globe’s finances had improved after aggressive cost cutting that included new union contracts that saved $20 million, cuts in management compensation, and consolidation of printing plants. The Globe also increased revenue by significantly raising the price of newsstand and home delivery copies of the paper.
“With these strategic steps, the Globe is on track to achieve substantial savings and is on a path to a more secure financial future,” Sulzberger and Robinson wrote.
The executives also acknowledged the turmoil the potential sale had caused employees.
“We know this has been a long and painful process, and we deeply appreciate the focus and dedication that you have all displayed over the past several months,” they wrote.
Robinson will be in Boston to meet with Globe employees tomorrow morning.
Terminating the sale caps a tumultuous period for the 137-year-old newspaper. In April, the Times Co. threatened to shutter the Globe unless it got $20 million in concessions from its unions. The recession and migration of readers and advertisers to the Internet deeply hurt the Globe’s advertising revenues. The once robustly profitable paper lost $50 million last year and was at one point on track to lose $85 million this year. By June, the Times Co. had hired Goldman Sachs to manage a possible sale of the Globe and the T&G.
Ultimately two groups submitted bids to buy the Globe and the T&G. One team was led by former Globe executive Stephen Taylor and a member of the family that sold the Globe to the Times Co. The other was Platinum Equity, a Beverly Hills, Calif. buyout firm that owns the San Diego Union-Tribune.
Taylor, in an interview, said he found out about the Times Co.'s decision by reading it on Boston.com. "I perfectly well understand and always have that it's the Times's perogative to make the business decision that they feel is best for them."
Taylor, who worked at the Globe for two decades, said he wants to see the paper thrive. "I'm very grateful to my teammates and to a lot of great people in Boston who wanted to help see this project succeed, as investors or in any other capacity. But above all, I really care about the Globe and want the Globe to succeed on its own merits and in its mission to serve the community as well as possible."
Globe employees said the announcement eliminated some of the uncertainty they had faced.
"I have to admit I'm relieved that the speculation is over,'' said Mary White, president of Teamsters Local 1, which represents more than 200 mailers. "We know who we're dealing with, and I don't think that's a bad thing."
Added Martin Callaghan, president of the Boston Newspaper Printing Pressmen's Union, of the Times Co.: "I can't say I've been totally disgruntled with them as owners. Hopefully, the Globe will continue to improve and we can go and negotiate a wage increase."
Others expressed relief the paper had not been sold to Platinum Equity, a firm that is known for deep cost cutting.
"These days, when you find out something isn't being taken away, that counts as good news," said David Filipov, a Globe reporter. "What's not being taken away is our stability, as uncertain that stability may be."
Another reporter, Marcella Bombardieri, said the Times Co. decisions means "things can quiet down and we can go back to doing our job."
She said she also hoped that the Times Co. would contribute more to employee health plans, which were cut as part of union concessions. Employees face much higher premiums and less coverage.
"If things are going well enough to keep us, they should do something for our health plan," she said. "I hope they remember how much they extracted from employees."
As for the fate of the Worcester paper, Sulzberger and Robinson said in their memo they "are determined to reach a conclusion there quickly."
A group of Worcester businessmen submitted a bid to buy just the T&G, according to the paper. The team is led by Ralph D. Crowley Jr., chief executive of Polar Beverages Co., and Harry T. Whitin, the former T& G editor. Their bid was also unknown.