The New York Times may have found a "greater fool"

Much of the trouble with the financials at the New York Times (NYSE: NYT) is blamed on overexpansion in the newspaper industry just as falling advertising and rising prices for newsprint and editor staffs were headed through the roof. By many accounts, the Boston Globe is only worth $50 million. Two years ago, Jack Welch and a group of businessmen approached the New York Times about paying $550 million for the paper.

Now, the New York Times, facing debt payments of $400 million next year, is trying to sell its 17.5% stake in the parent of the Boston Red Sox, and perhaps its 100% ownership in the Globe. It may have found one of those suckers who are born every minute.

According to the Financial Times, "The company began discussions two weeks ago with Jack Connors, a former advertising executive in Boston, to sell the Globe and its 17.5 per cent stake in the Red Sox."

While having a piece of a successful sports franchise may be a good way to make money, owning the Globe is an outstanding way to lose it. The Boston paper has lost more than 20% of its advertising revenue this year, and its circulation is falling. The Globe almost certainly loses money, and that is bound to get worse in 2009 as the recession deepens. As classified advertising, one of the cash cows for newspapers, moves to competitors on the internet, the Globe may never see a penny of improvement in its revenue when the economy recovers.

If the New York Times can get a dollar for the Globe, it is much better off than it is now.

Douglas A. McIntyre is an editor for 247wallst.com.