Two suitors for (Boston) Globe join forces to submit bid (Dinosaur Media DeathWatch™)

Boston Glob ^ | July 3, 2009 | Robert Weisman and Beth Healy

[abb]

Former advertising executive Jack Connors and private equity investor Stephen Pagliuca have joined forces to prepare for a potential bid to buy The Boston Globe, according to people briefed on the sales process.

This week the two got approval from the Globe’s owner, The New York Times Co., to team up for a potential bid, the sources said. Connors and Pagliuca had been weighing separate bids for New England’s largest daily. Nondisclosure agreements had stipulated bidders could not work together, but the two sought permission to collaborate.

As that team and at least one rival local group craft preliminary bids, due Wednesday, the Times Co. has moved to make a sale more palatable by asking would-be buyers to assume only a portion of the Globe’s pension liability, a major concern to prospective owners, the sources said. They spoke on condition of anonymity because they were not authorized to discuss the sales process.

They said the overall liability from pension plans at the Globe exceeds $200 million. That figure represents underfunded accounts for pension funds for management and white-collar unions, as well as for multi-employer funds for union locals that also include members from other companies.

In a letter to potential bidders last week, Goldman Sachs & Co., which the Times Co. hired to manage the sale, said buyers would have to assume $51 million in pension liabilities for the Globe and $8 million for the Worcester Telegram & Gazette. The Times Co. also owns Central Massachusetts’s largest daily and wants to package it in the Globe sale.

Like pension funds at many companies, the Globe’s funds have been squeezed over the past year by the stock market decline.

snip

[abb]

The thing will sell for the price of the land beneath the buildings, if that.

[abb]

ping

[abb]

http://www.thewrap.com/ind-column/firing-john-arthur-wont-fix-la-times-what-will_4098
Firing John Arthur Won’t Fix the L.A. Times. What Will?

http://www.laobserved.com/archive/2009/07/pre-holiday_putsch_at_lat.php
Pre-holiday putsch at L.A.Times *

http://www.latimes.com/business/la-fi-times3-2009jul03,0,1050740.story
2 senior L.A. Times editors get new responsibilities

[Crawdad]

God has ways of telling people they have too much money.

[Proud_USA_Republican]

"said buyers would have to assume $51 million in pension liabilities"

Bwhahahahaha!!!!

[abb]

Pinch will wind up having to pay someone to take it.

[Bernard]

According to Robin Williams, cocaine was God’s way of telling you that you had too much money. Now it’s taking over a failed pension plan with a newspaper attached.

[TheLawyerFormerlyKnownAsAl]

Several years ago, I believe Connors and Jack Welch together expressed an interest in buying the Globe and were rebuffed. Apparently, Welch is no longer interested or else he’s way in the background, out of sight. Why anybody would be interested given the pension liabilities and unprofitability of the business itself I do not know.

[abb]

That is correct. The number that was floated was $500 million plus. Pinch should have taken the deal.

http://www.boston.com/ae/media/articles/2006/10/25/local_group_may_bid_for_globe/
Local group may bid for Globe
Retired GE chief, adman involved; paper not on block

[Lucius Cornelius Sulla]

Good Lord, the LA Times put their obituary editor in as managing editor! How appropriate!

[abb]

ROFLMAO!! I didn’t read that far. Indeed an appropriate promotion.

[abb]

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=109141
Mag Bag: 279 Mags Fold In First Half of ‘09

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/02/AR2009070201563_pf.html
Post Co. Cancels Corporate Dinners

http://www.nytimes.com/2009/07/03/business/media/03post.html
Pay-for-Chat Plan Falls Flat at Washington Post

http://www.latimes.com/news/nationworld/nation/la-na-washington-post3-2009jul03,0,6582543,full.story
Washington Post scraps plans for ‘salons’ after uproar

http://www.johntemple.net/2009/07/lessons-from-washington-posts-fiasco.html
Lessons from The Washington Post’s fiasco over off-the-record corporate dinners

[Lucius Cornelius Sulla]

The WAPOST is apparently a big fan of ‘pay for play’ politics.

[Zakeet]

The thing will sell for the price of the land beneath the buildings, if that.

Let's put things into perspective:

The Globe:

• Has $200 million in unfunded pension liabilities with the stock (and soon bond) market tanking which means this amount will soar.
• Was losing $85 million this year before only $20 million was wrung from belligerent unions.
• Has ad revenues dropping at the rate of about 20 percent per year.
• Just hiked newsstand and delivery prices "significantly" which combined with a falling readership will undoubtedly result in a decrease in subscription revenues over the long term.
• Has many tens of millions millions more in liabilities on their balance sheet.
• Is located in a high tax region with no sign of an economic recovery in sight.

The market for newspaper deals is in the toilet because of all the transactions which soured in the past and the sorry state of the industry.

Goldman sent the Globe package to their stable of well-heeled ponies. The Taylor family, who sold the Globe to the NY Times a few years ago for $1.1 billion is considered a "prospective buyer" by Globe writers, but has to date indicated no interest. Two (and only two) potential local sources are joining forces to begin to take a harder look at the Globe package -- meaning they need to share evaluation costs (which typically aren't much) in order to undertake this preliminary step. Both are from the Boston area -- indicating they are likely trying to placate the local country club crowd (i.e. "At least we gave it a look"). Even if they eventually desire to tender a bid (which is by no means certain, or even likely), they will not compete against each other.

Bottom line: Like so many other Globe stories, this article takes a little information and tries to spin it into a story supporting a desired outcome. In fact, the newspaper is terminally ill and nothing short of government intervention can save it.

[abb]

That stuff has been going on for years - we know it and they know we know. And despite the protestations of the newsroom, they know how the game is played. Note all the feigned outrage from the news types.

What happened is the marketing types got a little carried away. Such ‘salons’ are supposed to handled by word-of-mouth on a need-to-know basis.

The P. T. Barnum promotion with glossy flyers is inappropriate for such events.

This time, they got caught.

[abb]

http://www.washingtontimes.com/news/2009/jul/03/post-shoots-self-in-ethical-foot/?feat=home_headlines
Marketing ploy backfires on Post

[abb]

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003990513
QUESTION OF THE DAY for Friday: What Do You Think About the ‘Wash Post’ Dinner Scandal?

http://www.editorandpublisher.com/eandp/departments/business/article_display.jsp?vnu_content_id=1003990329
Suburban Dallas Community Newspaper Group Shuts Down

http://www.editorandpublisher.com/eandp/departments/business/article_display.jsp?vnu_content_id=1003990313
Journal Register Sells Cluster of Michigan Papers

[abb]

http://www.youtube.com/watch?v=RdpXkGllqWg&feature=player_embedded

Washington Post All Access Fire Sale!

[abb]

http://www.slate.com/id/2222093/
Monetizing the Washington Dinner Party

The Washington Post’s boneheaded—and aborted—plan to lobby for lobbyists.

[abb]

http://www.nypost.com/seven/07032009/business/all_acce_press_177345.htm
ALL-ACCE$$ PRESS
WASHINGTON POST STOPPED FROM SELLING $25K POLITICO ‘SALONS’