The New York Times Company is attempting, not for the first time, to sell the Boston Globe, Bloomberg reports today, although it still will not be easy. It's a logical step for the Times Company, which saved a dismal 2012 in terms of advertising dollars by unloading its outside brands, including a bundle of smaller-market newspapers and a stake in the Boston Red Sox. As the final extra piece of a shrinking empire, the Globe was obviously next to go and has been for some time.
In the past, [Former CEO Janet Robinson] had resisted selling the Globe. She wanted to wait until the Globe's new pay wall, which launched last fall, took effect and possibly improved the paper’s sale value. “Janet was the leader of the group that didn’t want to sell it, and because she was boss, her voice carried,” says a person familiar with the situation.
The consideration led to a power struggle within the Times-owning Sulzberger family involving cousin Michael Golden:
In Golden’s estimation, Robinson had not pushed hard enough to sell the paper, and he wanted to see it sold sooner rather than later. Since the economy had collapsed in 2008, Golden and others had begun to wonder if Robinson had missed a window to sell when the Globe and About.com were worth a combined estimated $1 billion. And there was another possibility: Once those properties were finally gone, Golden could make a play for CEO himself, pushing Robinson aside. [...] And if the Globe was sold, perhaps the Times could raise enough cash to pay down its debts and afford a $25 million annual dividend again, assuaging the family’s financial anxieties.
Last fall, Golden wanted to take a closer look at the incoming numbers on the Globe’s pay wall, which launched on September 12, 2011, to see what progress it was making. But Robinson, according to people familiar with the matter, had instructed the Globe’s publisher, Chris Mayer, to direct any information about bostonglobe.com to her and not to Golden. As one Times executive told me, it looked like Robinson was “making a move against Michael.
“Once the situation involved a family member,” this person told me, “it became a true liability.”
Robinson was pushed out eventually, packing up and taking her millions, and the Globe is now CEO Mark Thompson's to deal with. The big question is a buyer: In 2011, Poynter called a sale "improbable (but not impossible)" noting, "Lenders and public-market investors are shunning the industry." The Wall Street Journal followed up last year, but still called it "tough."
With the Times Company struggling to come up with new sources of revenue, and following major cuts at the flagship paper, the pressure for Thompson to off-load the Globe is great. "Our plan to sell the New England Media Group demonstrates our commitment to concentrate our strategic focus and investment on The New York Times brand and its journalism," he said in a statement today. "We are very proud of our association with the Globe and the Telegram & Gazette, but given the differences between these businesses and The New York Times, we believe that a sale is in the best long-term interests of these properties and the employees who work for them as well as in the best interests of our shareholders."
The new CEO has been teasing a "new strategy," which he'll unveil this spring; shedding this weight would not only be a good start, but it buys him some breathing room.