There are reports that nearly 20 years after The New York Times Company shelled out a U.S. record $1.1 billion to buy The Boston Globe, the company is about to receive an unsolicited bid to take the ailing newspaper off their hands.
According to Boston.com, 38-year old Boston area entrepreneur Aaron Kushner is preparing a bid thought to be around $200 million for the paper and its parent company, New England Media Group.
Kushner has the support of former Globe editor Ben Bradlee, Jr., and Benjamin and Steven Taylor, members of the family that sold the paper to the Times in 1993.
The Times is mum on the matter:
A spokeswoman for the Times Co. declined to comment. The Times Co. previously tried to sell the New England Media Group and received three offers in 2009. However, the company took the papers off the market as financial conditions began to improve.
If Kushner is successful in his bid he will be buying not just the Globe but also the Worcester Telegram and Gazette, for which the Times spent an additional $296 million, bringing the Times’ total purchase price to nearly $1.4 billion.
In 2007 as market conditions began to sag, the Times wrote down both properties by $814 million, leaving a book value of just under $600 million.
Even with an uptick in conditions in the last two years, it hasn’t been nearly enough to prevent continued losses now estimated at $85 million per year at just the Globe alone.
Kushner is handing the Times an early Christmas present with his bid. The paper can now rid itself of an albatross around its neck and at the same time raise some much needed cash to keep the rest of the company afloat. This also allows the Times’ executives to close an ugly chapter on what has to be one of the worst, if not the worst, business decisions ever made in the newspaper industry.
But I wouldn’t be surprised if the Times rejects the bid. Not because it is inadequate but because the Sulzberger family is too proud to admit they made a colossal mistake by buying the Globe in the first place.
As for Kushner, even with his entrepreneurial skills it is hard to imagine that there is any real value in buying the Globe beyond its Internet properties, and that he can ultimately recover his proposed $200 million investment.
Kushner may be a smart guy but this idea is more of a fools errand than anything else.