The New York Times Co said it has given up its plan to sell The Boston Globe and related businesses after drastic cuts it imposed on the daily newspaper earlier this year improved its financial position.
The announcement caps a painful odyssey for the 137-year-old Boston Globe that began earlier this year when the Times threatened to close the paper if it could not get its unions to agree to deep cost cuts.
Selling the Globe would have been a dismal exit from Boston for the Times. The company spent $1.1 billion to buy the Globe in 1993, at the time the most money ever paid for a single U.S. newspaper. The offers it reportedly received for the Globe this month were less than 10 percent of what it paid.
The Times did not mention the bids and officials were unavailable for comment about whether they played a role in the decision to stop the sale. The company instead said the Globe's financial outlook has brightened.
The Globe has significantly improved its financial footing by following the strategic plan it set out at the beginning of the year, Times Chairman Arthur Sulzberger Jr. and Chief Executive Janet Robinson wrote to Globe workers on Wednesday.
All along, we explicitly recognized that a careful restructuring of the Globe was one possible route and, thanks to your hard work, that is precisely what has been done, they wrote.
Robinson plans to meet Globe employees in Boston on Thursday, they added.
I think many of us felt that the more we learned about the potential buyers, the more the Times seemed to be the best possible owner for us, said Michael Paulson, a reporter who covers religion for the Globe.
When the decision was announced in the newsroom, he said there was no celebration but there was a sense of relief.
The Times said in August that it hired investment bank Goldman Sachs Group Inc to explore a sale of its New England Media Group, which includes the Globe.
The company did not say whether stopping the sale process was related to two offers it reportedly received last Friday, the day it had set for bids on the paper.
California investment firm Platinum Equity submitted a bid, according to the Globe, as did a group led by Stephen Taylor, whose family sold the Globe to the Times Co.
The groups made preliminary bids of about $35 million, plus the assumption of $59 million of pension liabilities, the Globe said.
Everything's for sale if the price is high enough and it's clear that whatever was offered wasn't high enough, said Beth Daley, a reporter who covers the environment for the Globe and is a delegate for the Boston Newspaper Guild, a union that tussled with the Globe earlier this year over cost cuts.
The Times and most other U.S. newspapers have been struggling to improve their finances as the recession and a shift of readers from newspapers to the Web hurts ad revenue. Some papers have shut down. Other publishers have tried to shed money-losing properties.
The Times said labor contract concessions would save the company $20 million in annual operating costs and consolidated printing facilities would save it $18 million a year. It also has reduced compensation for Globe managers and other non-union workers and has raised newsstand and home delivery prices of the paper, the memo said.
Previously, the Times said it forecast an $85 million operating loss for the Globe this year. Even with the savings it outlined, the paper likely will report a significant operating loss. Times officials were unavailable for comment on the Globe's financial position.
The Times, in a filing with the U.S. Securities and Exchange Commission, said it was still considering options for the Telegram & Gazette, a daily paper that serves Worcester, Massachusetts, a city about 40 miles west of Boston.
The Times wants to reach a decision soon and we will provide a full update to our colleagues as quickly as possible, Sulzberger and Robinson wrote.
It did not say if it is still trying to sell its interest in the company that owns the Boston Red Sox baseball team.
The company will report third-quarter results on October 22.
(Reporting by Robert MacMillan; additional reporting by Ritsuko Ando; editing by Gary Hill, Matthew Lewis and Andre Grenon)