David Carr surveys a series of alleged experts to try to determine the market value of the Boston Globe, now that it’s finally up for sale (oh, if only they’d sold it when they could have). He concludes:
No consensus, but most of the experts who judge media properties for a living seem to be saying that the only way The New York Times Company can unlock any value from The Boston Globe is to get the newspaper’s losses off its books. Next time you’re in line at Starbucks and buying a $2 cup of coffee, you might want to consider that you could have bought one of America’s most storied newspaper franchises for less.
Or you could buy The Globe for about the cost of buying a copy of The Globe.
Those who say it’s worth tens or even hundreds of millions are smoking bad shit. Remember that when Robert Maxwell “bought” the New York Daily News – when I worked there as Sunday editor – Tribune Company had to pay him $60 to cover some liabilities and then Maxwell cut more expenses than that … and it still went bankrupt.
Buying the Boston Globe is buying liabilities and shut-down costs and operating costs and pissed-off unions. Oh, joy.
Ken Doctor was most right in Carr’s piece when he said that The Times Company will try to make it look like it got money by holding onto liabilities. Any way you cut it, the Globe is not worth much of anything.
And if it does get bought, what happens? See: Philadelphia, Minneapolis, Tribune Company. Slow destruction follows.
I repeat: The best thing The Times Company could do is push The Globe into bankruptcy, shut down its production and distribution structure, reduce editorial and sales to essential and open-minded employees, go online-only, and come out as a much smaller but profitable company that is no longer a drain on and threat to The New York Times. This new Globe would also be a laboratory for The Times to learn how to recast itself.
: LATER: Ken Doctor adds at Seeking Alpha:
The Times gets shortchanged. It paid $1.1 billion for the paper just 16 years ago. It’s struggled to keep the Globe staffed through bad economic times. It’s subsidized losses.
The new owner takes on great risk. It’s highly unlikely any bank will finance a purchase, given the half-dozen bankruptcies we’ve seen over the last year in the industry. That means the new owner’s own money is immediately at risk. The new owner starts out behind, even with recent contract givebacks, given the trajectory of operating loss and a continuing 30% decline in year-over-year advertising revenue. Forget the purchase price; how many millions will I have to sink in within the next year?