Manchester fails to corral Boston Globe

Paper, once purchased for $1.1 billion, goes for $70 million

The New York Times announced today (Saturday, Aug.3) that it has sold the Boston Globe and other New England media properties to John W. Henry, principal owner of the Boston Red Sox. Henry paid $70 million. The Times had bought it in 1993 for $1.1 billion. This kind of a haircut is in line with the plunge in value of other daily newpaper properties. The times noted that last year, Philadelphia newspapers sold for $55 million, after selling for $515 million in 2006. The Times noted this morning that San Diego's Papa Doug Manchester had expressed interest in buying the Globe. On July 23, John Lynch, chief executive of Manchester's U-T San Diego, told an audience in Allied Gardens that the U-T owner was a finalist to buy the Globe. The decline in value of the U-T was in line with the drop of the Globe. About four years after the paper itself -- not the Copley chain -- was valued at $1 billion, it sold for a bit more than $50 million. Manchester then bought it for a reported price of $110 million -- a high price if he actually paid it.

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Comments

I don't think the NYT would have sold the Globe to Papa Dufus even if he was the highest bidder. NYT management would have done something to keep the paper out of his hands, due to the bad publicity that would have resulted from a Manchester sale, particulary if the Koch ("Coke") brothers were providing the financing.

Burwell: Yes, I think Times management would have fought to keep the paper out of the hands of Manchester or the Koch brothers, or surrogates of them.

However, the Times is publicly held. Some lawyers would have argued that the company was obligated to take the highest bid. Best, Don Bauder

LYNCH CLAIMS MANCHESTER GLOBE BID HIGHER: As suggested in the response to Burwell above, the Boston Herald, competitor of the Globe, quotes John Lynch, chief executive of the U-T, saying that, "We bid significantly more than [John Henry, who won the bidding]."

Since the Times is a publicly-held company, the deal could be challenged if Lynch's statement is accurate. "There are going to be a lot of ramifications," warns Lynch.

The Globe article said that Henry won in part because of his local roots, his business record, and the assumption that he will figure out how to run a newspaper, without interfering with its editorials. Apparently, several groups outbid Henry.

Jimgee: If several groups outbid the winner, the Times could be hit with some lawsuits, although I assume it is comfortable with its interpretation of the law. Best, Don Bauder

I hope its comfort level is consonant with reality, because it is a nice idea to sell to a local person.

Yankeedoodle: If a media company is selling an asset, it is understandable why it would want a buyer who would run the outlet responsibly -- not use it as a propaganda rag reflecting the new owner's biases and touting corporate welfare projects that would benefit him/her. Best, Don Bauder

Glad Papa Doug did not snag Boston Globe. Buying a liberal rag does not make any business sense whatsoever. Let NYT and BG dies a natural death.

WJGBalderama: If Manchester had tried to turn the Globe into a U-T clone, he would have surely hastened the end of the publication. Best, Don Bauder

I had hoped the Taylor family, having profited hugely in the sale of the Boston Globe to the NYT, might have taken the paper back to keep it out of the hands of people like Douglas Manchester. But I guess not -- the Irish in Boston used to say that the Yankee establishment got rich by being franks-and-beans tight-fisted -- and the Taylors had a lot of family members wanting a pay-out. So the Globe went to Red Sox owners who don't know jack about journalism, but they understand Intensely Local, so that's some small consolation. I hope it works out.

monaghan: The Taylor family had owned the Globe from 1873 to the 1993 sale to the Times. Best, Don Bauder

Jimgee: Yes, Lynch wants the cost of making his bid back. Note, too, that the Times said the winning bid was the best for its shareholders. Best, Don Bauder

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