Fifteen years ago, The New York Times Co. paid $1.1 billion for The Boston Globe, but one newspaper industry analyst estimates that paper is worth only a quarter of that now.
One of the top daily newspapers in the country, The Boston Globe, is on track to lose $85 million this year and its owner, the New York Times Co., is threatening to shut down the 137-year-old paper unless workers agree to pay cuts by the end of the month.
A few years ago, the Globe closed it foreign bureaus in an effort to reduce costs. But, says editor Marty Baron, the cuts the paper is faced with now are even more difficult.
"Today, that decision over foreign bureaus looks easy. The decisions we are making today, as money becomes more painfully tight, are harder. They cut closer to the bone, threatening to remove muscle," Baron said last week in a talk about the "shrinking newsroom."
The same day Baron spoke, the New York Times Co. gave an ultimatum that Globe workers call draconian: Give up $20 million in pay and benefits by the end of the month or else see the paper shut down.
Suddenly, readers used to waking up to headlines exposing state government corruption or sex abuse in the Roman Catholic Church, woke up to the headline exposing the possible end of the paper altogether.
"It'd be a sad day in Boston. Paper's been here over a hundred years, right? ... It's just part of the city, part of the history of Boston," says Mike Kelly, a power line repairman who looks forward to picking up a copy each morning.
Fellow reader David Bragg calls the potential loss of the paper a depressing prospect: "It's a little frustrating that an outside company hundreds of miles away might make a business decision that impacts millions of people here in New England — do away with their main news source."
But that main news source isn't exactly making it easy on the parent New York Times Co. Even after getting rid of 50 people in the newsroom last week, The Boston Globe is still losing as much as $7 million per month. And The New York Times is having its own problems making ends meet.
So Lou Ureneck, the head of the journalism department at Boston University, says the Times Co. is sending the message: It can no longer subsidize the Globe's losses. Even so, he says: "It's unlikely the paper will be shuttered. It's a possibility, but I don't think it will happen."
Ureneck suspects that the Times Co. is trying to shore up the Globe's finances in order to sell it. But buyers nowadays are few and far between; other metro dailies up for sale recently in Denver and Seattle failed to find one. And even if the Times Co. found a savior for the Globe, it's unlikely the company would get anything close to the $1.1 billion it paid for it 15 years ago. Newspaper industry analyst John Morton says the Globe is worth maybe a quarter of that now, but he thinks the Times won't let it go for that.
"I doubt whether the New York Times is eager to try to get out of their situation here. I think they want to improve it, and that's what they're trying to do," says Morton.
After all, he says, the Times Co. is in the newspaper business and wants to run profitable newspapers. But as circulation and ad revenue keep declining, that's getting a lot harder. As Globe editor Baron said in his talk last week: "We do not know long-term, or really even short-term, what our actual financial resources will be."
Curt Nickisch reports from WBUR.