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February 21, 2013 12:24 am
The New York Times Company on Wednesday said it will put its Boston Globe newspaper and related New England media properties up for sale, as the publisher whittles down its business and focuses on its namesake brand.
The New York Times said it hired Evercore Partners to manage the sale of the unit, called the New England Media Group. One person familiar with the matter said the sales process had just started and no serious bidders had emerged.
“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,” said Mark Thompson, its chief executive.
Kannan Venkateshwar, an analyst with Barclays Research, predicted that the group could fetch about $150m to $180m.
As a large metropolitan newspaper, the Boston Globe has faced a different set of challenges than the New York Times, which has a broader national and international appeal. Big city newspapers have been hit especially hard as digital transformation impacts the industry; eroding ad and circulation revenues.
Total revenues in the New England Media Group slipped 0.8 per cent in 2012 to $394.7m compared with the previous year. While circulation revenues were about flat, advertising revenues in the group dropped 6.1 per cent.
The Boston Globe has had some success from its experiment to split its digital operation into two, separating a free Boston.com from a new BostonGlobe.com site, for which it charges a $3.99 weekly subscription.
The Globe had 28,000 digital subscribers at the end of the fourth quarter of 2012, up about 8 per cent since the end of the third quarter of 2012.
“With only 28,000 paywall subs at the Globe . . . it’s clear that it would be challenging to build digital scale, and circulation trends in the market over the past decade certainly haven’t helped,” John Janedis, an analyst with UBS, wrote in a research note.
“It’s clear that it would be challenging to build digital scale, and circulation trends in the market over the past decade certainly haven’t helped (down about 50%),” John Janedis, an analyst with UBS, wrote in a research note.
A sale has been a subject of speculation since the New York Times sold off its About.com group, television group, regional newspapers and stake in the Boston Red Sox baseball team. The New York Times has generated about $1bn in asset sales over the past year, according to Mr Venkateshwar.
Over the years, the Boston Globe sparked interest from various bidders. In 2010, Aaron Kushner, the owner of a greeting card company, attempted to put together a bid for the newspaper. In 2006, Jack Welch, the former chief executive of General Electric, assembled a group to buy the newspaper.
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