December 27, 2008 2:00 am
The New York Times is aggressively courting buyers for its stake in the Boston Red Sox baseball team and potentially the Boston Globe newspaper in a transaction that could attract bids worth $200m-$225m, according to a person familiar with the matter.
The Times, which has been rumoured to be exploring asset sales for months, faces a cash shortage next May when a $400m credit facility matures and revenue from continuing operations falls amid a severe advertising decline that has ravaged publishers in the US.
The latest overtures have piqued the interest of a group of wealthy Boston business leaders, who have also discussed other broader scenarios to improve the state of local media. Publishers' moves to cut costs drastically are considered to be hurting the quality of local coverage.
One scenario under consideration includes buying the whole or part of News Corp's Ottaway newspaper chain and consolidating and shutting down the Boston Globe's rival, the Boston Herald.
Patrick Purcell, owner and publisher of the Boston Herald and a former News Corp executive, was recently tapped by Rupert Murdoch's News Corp to run the company's Ottaway chain. News Corp pulled the Ottaway chain, comprised of eight daily newspapers and 15 weeklies, off the market after failing to sell the papers before a June 30 deadline.
One News Corp source said they were not currently involved in discussions. Mr Purcell was not immediately reachable. A New York Times spokeswoman had no comment.
To shore up cash, the Times has sought a sales-leaseback of its new headquarters, expecting to raise $225m as it continues to evaluate its portfolio of assets that also include About.com and a handful of regional newspapers.
The New York Times purchased a 17.5 per cent stake in the venture as part of a 2002 buy-out of the Red Sox franchise by a consortium led by billionaire hedge fund manager John Henry and film producer Tom Werner.
The Times' latest actions come after rebuffing an offer led by former General Electric chief executive Jack Welch and former advertising executive Jack Connors in 2006. At the time, Welch's group valued the Boston Globe at $550m to $600m.
This month, Barclays, which estimated the Globe's 2009 earnings before interest, tax, depreciation and amortisation at around $9 million, said The Times' stake in the Globe would only be worth $27m to $54m. Its stake in the Red Sox could be worth about $166m, Barclays said.
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