By: E&P Staff
Former General Electric Co. chief Jack Welch and well-known adman Jack Connors are exploring the possibility of making an offer to buy The Boston Globe from The New York Times Co. , the Globe reports today.
They are reportedly working with the investment bank JPMorgan Chase & Co. to analyze a potential deal. “They say JPMorgan has valued the Globe at $550 million to $600 million, well below the $1.1 billion the Times Co. paid in 1993,” the newspaper relates.
But the Times Co. has said repeatedly that the Globe, despite its continued poor recent financial results, is not for sale.
In a statement, Catherine Mathis, a Times Co. spokeswoman, said, “It is our policy not to comment on potential acquisitions or divestitures. We constantly review our portfolio of properties to assess their continuing relevance to our strategy. We view the Globe as an important asset, and we have taken many steps that we believe will improve its performance.” The Globe recently named a new publisher, P. Steven Ainsley.
Ainsley later sent the following memo to staffers, which began:
“As the front page story in today?s Globe points out, these are difficult
times in our industry. In cities across the country, rumors abound about the future of newspapers and these are likely to continue for some time. Boston is no exception. It is very frustrating to me that neither I nor the company can say more about them but because we are part of a publicly-traded company, to ensure compliance with securities laws, we do not comment on rumors of potential acquisitions or divestitures, regardless of whether they are true or not.
“What I can say is this, I am committed to improving the performance of the Globe. We have a great newspaper. We can make it even greater. And I mean that from both a journalistic standpoint and a business standpoint for the two go hand in hand. In order to continue to produce the high-quality journalism for which we have long been known, we must put this newspaper on a strong and stable financial footing….Together we will ensure that the Globe continues to produce outstanding journalism and together we can strengthen its financial foundation.
The Globe observes in its story topday that Welch, who grew up in Salem and moved to Boston in his retirement, and Connors, co-founder of the Boston advertising firm Hill Holliday, “are looking to assemble a small group of local business people for a bid that would include debt and equity, the executives involved in the effort say. Each man has tentatively committed $25 million to the deal, the executives say. A third partner, Boston concessionaire Joseph O’Donnell, also has committed $25 million, the executives said. O’Donnell also declined to comment.
“Like business leaders in other cities who have explored buying their local newspapers from large media companies, Welch, 70, and Connors, 64, see buying the Globe as a civic investment as much as a financial one, say the executives involved in the effort. Welch and Connors hope to return the paper to its community roots and stem continuing cutbacks in the editorial budgets and losses in advertising and circulation.”