The New York Times, which purchased the Boston Globe in 1993 for $1.1 billion, is now accepting bids to sell the newspaper for a price that’s expected to be in the $100 million range, or about one-tenth of the original purchase price, according to Bloomberg News.
Potential bidders include former president of the Globe Rick Daniels, and former Time Inc. Chief Executive Officer Jack Griffin, in partnership with cousins Steven and Ben Taylor, whose family sold the Globe to the Times 20 years ago.
The Times Co. put the Globe on the block in February and hired Evercore Partners to solicit bids for the paper, and for the Worcester Telegram and Gazette, which is part of the deal.
At the time of the purchase in 1993, the newspaper industry was on a growth tear that boosted circulation and profits to record levels. It was that growth and the expectation that it would continue unabated that led then-Times Co. chairman Arthur Sulzberger to buy the Globe at a price that turned analysts heads. For the Taylor family, which owned the Globe, it was an offer that was too good to refuse.
While the Globe remained profitable for a number of years, the recession that began in 2007 took its toll on all newspapers and hit the bloated Times Co. even harder, as circulation and ad revenue fell steeply. Needing cash to stay afloat, the Times Co. sold its gleaming new headquarters building in New York City and borrowed $250 million from Mexican billionaire Carlos Slim at 14 percent interest.
While the Globe purchase isn’t completely to blame for the Times’ woes, the company’s market capitalization has fallen 19 percent to $1.6 billion since the purchase, from a peak of over $8 billion in 1999. It has sucked up precious cash for the last several years.
With the sale, the Times will finally be able to end one of the most embarrassing chapters in its history and more fully focus on how to compete in the digital age.