The troubled 137-year-old The Boston Globe, which its owner, the New York Times Company, has been trying to hive off for some time, is reported to have three suitors ready to buy the struggling newspaper even as it fights a wage contract battle with its largest union.
The Boston Globe reported yesterday that ''Three Boston businessmen - a Boston Celtics owner, a former advertising mogul, and a member of the family that ran the Globe for generations - have emerged as prominent potential buyers of the Globe, according to people knowledgeable about their interest in the city's leading daily.''
The three reported suitors are Stephen Pagliuca, a managing director at Boston private equity company Bain Capital and co-owner of the Boston Celtics basketball team, Jack Connors, co-founder of a major advertising agency and reported to be worth about half a billion dollars, and Stephen Taylor, a former Globe executive and member of the family that sold the Globe in 1993 to the Times Co for $1.1 billion, in the biggest newspaper deal at that time.
In October 2006, Jack Connors and former General Electric Co boss Jack Welch were considering a joint bid for The Boston Globe, where JP Morgan Chase & Co had valued the newspaper at $550 million to $600 million, far below the $1.1 billion the Times paid in 1993. (See: Jack Welch may bid for Boston Globe, says report)
Although the three suitors have not made a formal bid, their decision may be hampered by the ongoing standoff between the Times Co and the Boston Globe's largest union, The Boston Newspaper Guild.
The Boston Globe broke the story just after a day it reported that Goldman Sachs had been hired by the Times Co to find a buyer for The Boston Globe.
The Boston Globe's largest union had narrowly rejected $10 million in wage and benefit cuts this week, which subsequently led to its parent, the New York Times Co imposing a 23-per cent pay cut, effective next week in order to keep the paper in circulation. (See: Boston Globe's largest union rejects wage and benefit cuts)
The Boston Newspaper Guild has now filed an appeal against the Times impositing a 23-per cent pay on the grounds of unfair labour practice charges with the National Labor Relations Board, a federal government body, which is scheduled to hold a hearing next week.
Since the Globe lost $50 million last year and has projected an $85 million loss this year, The Times Co wanted the Boston Newspaper Guild to agree on $10 million in salary concessions or half of all union concessions of $20 million, which had been approved by six other Globe unions earlier.
The Newspaper Guild is reported that it would like to negotiate for a stake in the company with potential buyers, which could mean that background talks are already being conducted by the union with the buyers.
The New York Times Co had put the 137-year-old Massachusetts-based Boston Globe, the 17-largest newspaper in the US by daily paid circulation, according to the US Audit Bureau of Circulation, on the selling block along with the Red Sox baseball team since last November to finance a $400-million revolving credit line that expired last month.
It had also borrowed $225 million against its Manhattan headquarters in December.
The Globe was until recent years one of the top US papers. It boasted a strong international, national and local reporting staff that rivalled its bigger competitors like The Washington Post, The Wall Street Journal, USA Today and The New York Times.
However, like all US newspapers, where 12,500 jobs have gone in US print journalism in the past two years, the Boston Globe has been forced to cut back on operations due to a fall in advertising revenues.