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By Catholic Online (NEWS CONSORTIUM)

8/5/2013 (1 year ago)

Catholic Online (www.catholic.org)

Purchased for $1.1 billion, New York Times unloads paper at $70 million

It was a deeply sad reminder of the decline of the newspaper industry in the wake of the Internet age . Purchased for $1.1 billion in 1993, the sale of the Boston Globe in 1993 set a then-record. Financially ailing, the New York Times has now sold the paper for $70 million - a STAGGERING 93 percent loss.

The New York Times has reported that the sale price does not include the Globe's pension liabilities. Apparently, those remain a Times' responsibility and expense.

The New York Times has reported that the sale price does not include the Globe's pension liabilities. Apparently, those remain a Times' responsibility and expense.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

8/5/2013 (1 year ago)

Published in Business & Economics

Keywords: Boston Globe, New York Times, sale, ad revenue, readership, newspaper, Internet


LOS ANGELES, CA (Catholic Online) - The 141-year-old newspaper was sold to Boston Red Sox owner John Henry. Figuring in 20 years of inflation makes the sacrifice price even worse. In addition, the Times retains the Globe's pension liabilities, estimated at over $100 million.

The Boston Globe had been up for sale since February of this year. Bids had previously been as high as $100 million. What might have sweetened the lower offer for the Times is that Henry offered "straight cash deal," which is expected to close sometime in September or October.

The Times turned down a $300 million offer from Aaron Kushner, CEO of Freedom Communications, Inc. in 2011. Kushner's offer even included the assumption of pension liabilities, which are currently estimated at $110 million.

The New York Times has reported that the sale price does not include the Globe's pension liabilities. Apparently, those remain a Times' responsibility and expense.

The Boston Globe enjoyed a circulation rate of 413,000 in 2002. Currently, the average weekday circulation today is nearly half that: 230,351.

Plagued with declining circulation due to online competition, both the Times and Globe have been plagued by faltering ad revenues that have only worsened in recent years. The Times reported its 11th straight quarter of falling ad revenue.

Ironically -- both newspapers continue to strongly endorse and champion President Obama and his economic policies, even though those policies have failed to create the kind of economic growth necessary to create a boom in advertising spending. The future doesn't look much brighter.

Last quarter the American economy only grew by 1.7 percent. Last month saw a mere 162,000 new jobs created, most of them part-time.
 

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