New York vs. Boston: Now it's personal
The Times' ultimatum to the Globe is 'taking a shot at the community'
BOSTON (Fortune) -- One of the saddest ironies about the possible demise of the Boston Globe is that most of us in Boston got the news when we woke up last Saturday morning and read about it in the Globe. "Times Co. threatens to shut Globe, seeks $20m in cuts from unions," was the front-page headline.
Wow, great story! I read the whole thing from start to finish before I even thought about putting the kettle on for coffee. I showed it to my wife as soon as she came downstairs. Everybody I ran into that day, wherever I went, that's the first thing we talked about.
That's what newspapers do. They put big topics on the civic agenda, they set up the common conversation. And in Boston, no newspaper does that like the Globe.
Not the Herald, which is great for sports and gossip but it's a sideshow, frankly; and not the alt-weekly Phoenix (even if it did scoop the Globe Friday night when it broke the news on its Web site).
"The Globe helped build our city," Boston Mayor Thomas Menino told Fortune. "The Globe holds people accountable on the issues, and that's important. You might not like it sometimes. Sometimes we don't agree. But they ask tough questions and back it up with data, real data. That's what's important. They're out there doing their work. It would be a real travesty if they weren't around."
Newspapers are struggling everywhere, we get that in New England. Denver's Rocky Mountain News died earlier this year. The Seattle Post-Intelligencer and the Christian Science Monitor switched to online only. In Detroit, the Free Press and the News quit making home deliveries all but three days a week.
All were victims of what Ben Taylor, former publisher of the Globe and a descendent of Charles H. Taylor, the Globe's first publisher in 1873, describes as the "secular slide that's taking place in the newspaper business."
And we get that the Globe is not immune. Weekday circulation, which stood at 323,983 for the six months ending Sept. 30, 2008, has been sinking steadily over the last decade, along with ad revenues. Five hundred union jobs have disappeared at the Globe since 2000. Losses are mounting: $50 million last year, according to published reports, and likely much more in 2010.
"I'm in the same business of trying to make budgets work," Mayor Menino points out, reasonably, "and it's very difficult these days when you don't have the revenues to match your need."
He's right, of course. But there's another factor here that might make us yearn for a little more righteous indignation on the part of our mayor. I'm referring to the involvement of a certain newspaper from a certain city. The New York Times Company (NYT) bought the Globe for $1.1 billion in 1993, and later added a 17% stake in two other Boston heirlooms, the Red Sox and Fenway Park.
While the Times recently put its piece of the Red Sox up for sale, so far, at least, it's not talking about shutting down the team. That would get us roiled up, for sure. But is the Globe any less precious?
Former General Electric (GE, Fortune 500) CEO Jack Welch approached the Times a few years ago and asked if the Globe was for sale. Welch says he never made an actual offer. Whatever price he had in mind for the Globe plus the Times' stake in the Red Sox, Fenway Park and New England Sports Network, he insists it wasn't anywhere near the $600 million figure that was tossed around back then.
"I think the New York Times is being unfairly battered for the price they turned down from us because they never had that price," says Welch. "That was the fictitious newspaper price. We sent a letter to [Times CEO] Janet Robinson. They wrote back and said they weren't interested." They might be now, but Welch has no interest any more in the Globe. "Oh no," he says. "God no. We've moved on."
So we're left with the possibility that someone from the one city we hate more than any other might shut down our biggest, most important newspaper.
Bruce Mohl, who worked as a Globe reporter for 30 years and now edits Commonwealth, a Boston-based quarterly, says, "It is easy to see this as a negotiating ploy. Because if I was the New York Times and I was really serious about shutting it down, I think I would come out and say something to the public about why I'm even raising this issue, as opposed to just sort of sitting on my hands and not saying anything."
"It's offensive that they don't even explain themselves," says Mohl. "It's not just taking a stance on the Globe, it's taking a shot at the community, I think, and you've got to explain yourself if you're going to do something like that." So far, the Times isn't saying anything.
Taylor, too, has a hard time imagining it would come to that, but, "I wouldn't want to test it," he says. "The players involved shouldn't try to test that question, in my view. I don't mean just the union players. I mean management and everybody else who's got a stake in making this thing work."
The last guy I talked to was Jim O'Shea, former managing editor of the Chicago Tribune and former editor of the Los Angeles Times. O'Shea was forced out of his job at the L.A. Times last year when he wouldn't agree to carry out newsroom cuts ordered by his publisher. O'Shea is at Harvard on a fellowship this year, so he reads the Globe now. The Times' "threat is just that," he says, "a threat. I think they're trying to get more money out of the place and that's what every newspaper is doing these days."
On the other hand, says O'Shea, this is "a company that is in New York, has a national newspaper, and it's basically fighting to preserve quality journalism. And their back is against the wall because of the debt they took on and the downturn in the economy. So I'm sure they are going around to all their properties, including the one in New York, and asking for cost savings."
"But I'm sure that it's also true," he said, "if you ask [Times publisher] Arthur Sulzberger, 'What's your No. 1 interest?' he's going to tell you, 'It's the New York Times.' Because that's the franchise. That's the one that he's going to want to see survive. And if others have to go in the process, they will go."