Today’s Wall Street Journal is reporting more potential concerns for the newspaper industry as Boston Globe’s owner, the New York Times Co. threatens to shutter the paper unless unions give more concessions. This comes after 500 jobs have already been shed since 200.
The Seattle Post-Intelligencer and Rocky Mountain News have been two of the higher profile papers to either go online only or close shop. The Chicago Sun-Times has gone Chapter 11. The news for the newspaper industry continues to get worse and worse. Now, one of the most respected names in the industry, the Boston Globe, is staring down the barrel of some serious trouble.
Having spent my college days in Boston, I grew to really enjoy the Globe. I come from the New York area where you have a healthy choice of tabloid or more serious newspaper options. In Boston, it’s the Globe and the Boston Herald. Those are the two biggies. The Globe always had a New York Times kind of feel to it. In 1993 that became official when it was bought by the New York Times.
Now some 16 years later the dramatic change in the newspaper industry is causing the Times to threaten that it will close the paper in a month if they can’t get concessions from the unions. The likelihood of a complete closing is not too high but the threat is enough to shake an industry that is already on the ropes.
The Times keeps making really bad financial decisions. As recently as 2006 they could have sold the Globe for between $500 to $600 million to a group led by Jack Welch. One would have to suspect that Mr. Welch is pretty happy that the Times said no. One analyst puts the current value of the Globe at between $12 and $20 million. Oh, how the mighty have fallen. Combine that with $50 million in losses in 2008 even a grade schooler can see that this is bad financial math happening here. Oh by the way, The Times purchased the Globe for a cool $1.1 billion back in ’93.
The Boston.com website of the Globe is not discussed in the article which seems peculiar. One thing is clear though. The mayor of Boston, Thomas Menino, has made it clear that despite the current “bailout chic” there will be no help coming from the government. While it seemed kind of strange to read since I wouldn’t expect that would even be a possibility it is another indication of the times we live in. If you fail it’s OK. That’s what taxpayers are for; cleaning up poor business practices. A preemptive strike by local pols will hopefully keep that kind of talk off the table.
So who’s next? The New York Times itself has been maneuvering to stay afloat. What about the Washington Post? As was asked here recently, will you miss the papers if they just go away?