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Source: ONE News -
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The New York Times Co said it has given up its plan to sell The Boston Globe and related businesses after drastic cuts it imposed on the daily newspaper earlier this year improved its financial position.
The announcement caps a painful odyssey for the 137-year-old Boston Globe that began earlier this year when the Times had threatened to close the paper if it could not get its unions to agree to deep cost cuts.
"The Globe has significantly improved its financial footing by following the strategic plan it set out at the beginning of the year," Times Chairman Arthur Sulzberger Jr. and Chief Executive Janet Robinson wrote in a memo to Globe workers on Wednesday.
"All along, we explicitly recognized that a careful restructuring of the Globe was one possible route and, thanks to your hard work, that is precisely what has been done," they wrote. Robinson plans to meet Globe employees in Boston on Friday, they added.
The Times had said in August that it hired investment bank Goldman Sachs to explore a sale of its New England Media Group, which includes the Globe.
The company did not say whether stopping the sale process was related to two offers it reportedly received last Saturday, the day it had set for bids on the paper.
California investment firm Platinum Equity submitted a bid, according to the Globe, as did a group led by Stephen Taylor, whose family sold the Globe to the Times Co in 1993 for $1.1 billion.
They had made preliminary bids of about $35 million, plus the assumption of $59 million of pension liabilities, the Globe said.
The Times said that labor contract concessions would save the company $20 million in annual operating costs, and consolidated printing facilities would save it $18 million a year. It also has reduced compensation for Globe managers and other non-union workers, and has raised newsstand and home delivery prices of the paper, the memo said.
Previously, the Times said that it forecast an $85 million operating loss for the Globe this year. Even with the savings that it outlined, the paper likely will report a significant operating loss. Times officials were unavailable for comment on the Globe's financial position.
The Times, in a filing with the US Securities and Exchange Commission, said it was still considering options for the Telegram & Gazette, a daily paper that serves Worcester, Massachusetts, a city about 40 miles west of Boston.
The Times and most other US newspapers have been struggling to improve their finances as the recession and a shift of readers from newspapers to the Web hurts ad revenue.
The company plans to report third-quarter results on October 22.
