Threat to shut Boston Globe shows no paper is safe

NEW YORK — When it bought the Boston Globe for a record $1.1 billion in 1993, the New York Times Co. added one of the nation's most acclaimed and profitable newspapers to its empire.

But analysts say the 137-year-old Globe has been a money-loser in recent years, and the Times, now $1.1 billion in debt, is threatening to shut down Boston's pre-eminent paper unless it gets $20 million in union concessions.

Faced with the global recession and declining revenues, the newspaper business is reeling _ one major paper has already folded this year and several others are seeking bankruptcy protection. But the threat to the Globe, announced Friday on the Globe's Web site, has shocked some industry insiders, who say it shows no one is safe.

"It is a huge warning shot across the bow of the newspaper industry. If this can happen to the storied Boston Globe, pretty much nothing is safe," said Boston University communications professor Tobe Berkovitz.

Of the major dailies that have gone down, none has the cachet of the Globe, he said.

The threat to close the paper "sends a very clear message to all employees and unions of surviving newspapers _ that this is not business as usual," said Ken Doctor, a media analyst with the research firm Outsell. "This is uncharted territory."

The Times bought the Globe in 1993 for $1.1 billion _ the highest price ever for a single American newspaper _ getting one of the country's most respected papers. The Globe has won 20 Pulitzer Prizes and has been lauded for some of its work, including its coverage of Roman Catholic clergy sex abuse scandal.

But since its purchase, the Globe has gone through several rounds of layoffs and buyouts. As readership shifts to online news, the newspaper's average weekday circulation fell 10 percent to 323,983 for the six months ending Sept. 30, compared to the same six-month period in 2007, according to the Audit Bureau of Circulations.

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Advertising revenues industrywide have plunged by more than 16 percent in 2008, according to the Newspaper Association of America.

Newspapers all "have a sword over their heads," said Doctor. If the industry wants to survive, he said, "everyone has to give some blood."

The Globe reported the Times' demands a day after executives from the Times delivered its ultimatum to leaders of the Globe's 13 unions. Boston Newspaper Guild president Daniel Totten told the Globe the concessions could include pay cuts, the end of company pension contributions and the elimination of lifetime job guarantees. The Guild is the Globe's biggest union, representing more than 700 editorial, advertising, and business employees.

But some say the Times' threat may be a negotiating tactic as it strives to shed its debt, which stood at $1.1 billion at the end of 2008. It recently sold 21 floors of its new midtown Manhattan headquarters building for $225 million, asked most employees to accept a 5 percent pay cut through the end of the year and secured a $250 million infusion from a Mexican billionaire by agreeing to pay an abnormally high interest rate of 14 percent in addition to giving him potentially valuable stock warrants.

"We're a long way from a newspaper that needs to be shut down. I think it's a bargaining strategy," said Alan Mutter, a former journalist-turned-entrepreneur who writes a blog called Reflections of a Newsosaur. He said he doesn't think the Globe is in imminent danger of folding.

Globe spokesman Bob Powers declined to comment Saturday; Times spokeswoman Catherine Mathis did not immediately return a call for comment.

Doctor said the Times' threat to close the Globe parallels what Hearst Corp. did with the money-losing San Francisco Chronicle, threatening to shut it down barring concessions. Chronicle staffers took 120 buyouts last week, but the paper's seeking 150.

Elsewhere, Scripps Co. stopped publication earlier this year of Colorado's oldest newspaper, the Rocky Mountain News, in Denver. Major newspaper companies that have filed for bankruptcy protection in recent months include the owners of The Philadelphia Inquirer, Minneapolis Star-Tribune, the Chicago Tribune and the Los Angeles Times. Newspapers like the Seattle Post-Intelligencer and another venerable Boston publication, The Christian Science Monitor, stopped daily publication in favor of online news.

Matt Storin, who was the editor of the Globe when the Times purchased it, said he was shocked and saddened when he saw Friday's headline. The threat to close it "is obviously a negotiating tactic, but one that has to be taken seriously," said Storin, who now teaches journalism at Notre Dame University.

"I do think it's obvious that the Times would like to get the Globe off its books," he said. "It's possible they're trying to reduce costs because they have a prospective buyer who is negotiating on that basis."

___

Associated Press Writer Jay Lindsay contributed to this report from Boston.

Comments

[jeffp26]

The NY Times is in debt because it's brilliant executives spent almost $3 billion over the last ten years buying back stock at what we now know were inflated prices.

The problems it faces are largely self-inflicted.

[zizyphus]

Not all newspaper are in debt. The small town papers without debt are going to last the longest. They continue to serve the population who don't rely on the internet for news.

[Celldumceen]

Hmmm! Lets see! The Globe, like a lot of other newspapers, give away their product for free and then wonder why they're losing money! Its shocking to see so many papers go belly up when its common knowledge that most online news operations like this one, Townhall and the Daily Beast get their content from newspapers. Not to mention all those morning shows where the host sit there and read the paper back to us for 2-3 hours! Newspapers need to start charging anyone who wants access to their content a fee for that right! Only fools give away information for nothing!

[MsIrisMG]

Somehow, the Globe has to get away from the New York Times and become it's own paper/media company once again. That's the trouble with the American auto industry, too; they need to get away from these big conglomerates that try to be all things to all people and go back to being individual car companies like Tucker, Hudson, and Saturn. Perhaps niche products will make it easier to stay in business.

[MsIrisMG]

The Oklahoman, where I work, has been unionless for over 30 years. That said, even our company has downsized twice in five years. A union coneession wouldn't be the worst thing in the world to happen, if it's a choice between that and not having work at all. There are a lot of people like me who are in our mid- to late 40s and older, we're not old enough to retire, and it's not as if we can go out and get another newspaper job, because that seems to be a dying industry. I would hate to see the Globe disappear due to stubbornness, and it makes me sad to see how writing standards and the medium that used to have them have dwindled so.

[JLRoberson]

Can I just ask something?

Did no newspaper in America take steps toward this transition long ago, when it became apparent this was the future? Not one?

No, it doesn't appear they did. What they did was:

a) Rely upon sentimentality, i.e,. "But I just like the FEEL of the paper in my hand!" or "I can't imagine not having my morning paper--it's a ritual." These are not things to count on, as when taste changes, you go with it. Yet they believed these things would trump ease of use and quickness of access.

b) Guilt your own audience. Basically, "They'll be sorry to see us go," or some other form of judgment on your audience for "allowing" the paper to go, as though we ever had any control of it one way or another. That a person who doesn't support their local paper is a bad person, less concerned about...wh­at? Information through one particular format?

Relying on snob value, sentimentality, things like this? That's all newspapers did. Rather than adapt, they assumed they were special cases. And that worked so very well for the music industry.

And meanwhile, long ago, the papers just became loss leaders for much larger, and very few, corporations a long time ago that didn't give a damn about readership. Let's also consider such things as when the Chicago Tribune broke a distributor's union by using the homeless as pawns to be their paperboys, and not just them that did that.

[planetjeffy]

All newspapers are dead. Advertising dollars have disappeared and Craigslist killed their overpriced classifieds - the biggest newspaper moneymaker. It costs too much to print and deliver a paper. With the web, newspapers are old news. The economic collapse has sped up the inevitable.

[Celldumceen]

You have no idea what your talking about, without newspapers and there content to draw upon, the websites you visit wouldn't exist!

[ACMallet]

Another liberal rag that stopped serving its readers years ago.

Pull the plug.

[MsIrisMG]

Is that to say its readers are not liberal? Then why are they still reading? Massachusets IS a blue state. Help me out, here.

[Bubbas]

I live in Boston. A big portion of the Globe's morning readership has been claimed by the free 'Metro' for the past 5+ years. The Metro pays itself through advertising.

The rest of the news is filtered through the Internet.

It is worrisome that true journalism will be compromised with bloggers and the theft of copyrighted written works by other websites, however if the Globe is to remain profitable (as well as many other papers), then they will need to slim down their workforce and move more to an online direction which is self supportive with ad revenue.

[larry278]

For every Boston Globe there are 500 Johnson Family Daily Blutes which will pollute the water when they fold if they slip into a watery grave.

[timnel]

The Globe is almost gone already with the exception of sports all the articles are from other papers and the AP. The Taylors should be proud the sold out

[mojoman]

Anyone paying attention knows that the traditional newspaper business model is in trouble, and has been for years. Competition form the web, advertising & circulation down, and parent companies promising unrealistic profits to shareholders have put them in a bind. Yet to listen to wingnut reasoning around the Globe story, it's all because of liberal editors and unions that newspapers are dying. Never mind that conservative leaning papers are hurting, or newspapers that don't have union employees are also in decline, because that doesn't fit with the GOP talking points.

Middle class workers are under siege in America, but corporate run media has brainwashed enough dittoheads to support their agenda, so that they can't even understand how completely they're being screwed. It would be funny if it weren't so pathetic.

[NHBill]

power to the people! mojoman peaks the truth. debt not unions have pushed most papers to the brink. with that said demographics are also hurting newspapers. they are like a beautiful music radio station in 1985. they were #1 in the market for decades but the audiences is literally dying on them.

[nomobull]

maybe if they catchup with the people and stop spouting opinion as story. and returned to being balanced and unbiased maybe they could survive.

[jennamcjenna]

Interestingly, the concerns about floundering papers like the Boston Globe are often linked to a kind of local patriotism that really doesn't exist anymore. Once upon a time, newspapers were like sports teams or local celebrities: They served as a social glue, holding together a community that was too large to stay connected in the ways that rural communities modeled for us. But that was a century or more ago now. Today the internet connects us to communities that extend far beyond geographical boundaries, and until newspapers and media analysts understand this they won't be able to keep up. I recently wrote about this on my own blog at http://jennamcwilliams.blogspot.com/2009/04/how-to-kill-newspapers.html. I'd love for you to check it out!

[TyroneBaitson]

The blogger so nice they named her twice?

[ranchero42]

When my local paper shrunk and went online only, I was grateful it wasn't bought by some toad from "downunda" or somebody who thinks they're Jesus. Perhaps my opinion is in the minority, but I believe that balanced editorial content is in everyone's interest. Could it be there's more than a few in Boston and New York who can appreciate this as well?