By: Joe Strupp
The Boston Globe is already indicating its potential to be sold, just a day afte reaching a tentative agreement with the Newspaper Guild to cut some $10 million in annual costs.
Along with deals agreed to with six other unions, the paper has in place some $20 million in overall savings, a situation that makes it more attractive to buyers, according to a Globe story today.
“For a newspaper that lost $50 million last year and is on pace to lose even more this year, The Boston Globe is decidedly more attractive to a potential buyer today than it was just a week ago,” the report contends.
But it later admits, “the $20 million in concessions, as well as the flexibility that the Globe’s parent company, The New York Times Co., stands to gain by stripping away some job guarantees, do not necessarily mean that potential buyers will be lining up to own a slice of Morrissey Boulevard, financial analysts cautioned.”
“Cuts or no cuts, the Globe is still on track to lose money this year,” the story adds. “As famed investor Warren Buffett said at Berkshire Hathaway Inc.’s annual meeting last weekend, he would not buy a newspaper right now ‘at any price’ — and Buffett owns stakes in two US newspapers.”
One point that will likely make the paper more attractive to buyers is the change in the lifetime job guarantee, which affects some 200 employees. “It is unclear how the offer the Guild is to vote on alters the lifetime guarantee language; more will be revealed at tonight’s union meeting,” the story said.
The story also cited as a possible buyer, Beverly Hills private equity firm, Platinum Equity, which recently bought The San Diego Union-Tribune, “despite the paper’s disastrously decreasing revenues.”
Mark Barnhill, Platinum Equity principal, declined to comment yesterday to the paper on whether the company might be interested in the Globe. But the story added, “even now, Barnhill said, with all the changes rocking the newspaper industry, Platinum Equity is looking to add more papers to its holdings.”