After months of speculation and years of underperformance, the New York Times Company (NYSE: NYT) has decided not to sell the Boston Globe and related businesses. The company claims that the changes made at the Globe to slash expenses and right the ship financially have made it worth holding on to the newspaper. This comes after two parties submitted their final bids (similar financially) for the beleaguered 137-year-old property.
The NY Times Co. picked up the Globe in 1993 for $1.1 billion. Since then, it's watched the paper's revenue and circulation plummet, a situation worsened by the advent of the internet and the newspaper industry's generally slow response to it. Now, it's apparently worth just under 10% of NYT's original purchase price, with the offers pushed higher by both parties' willingness to assume $59 million in pension liabilities.
Arthur Sulzberger Jr., chairman of the company, cites the Globe's firmer footing as a reason not to sell it. Of course, this is the genius who turned a $1.1 billion company into one worth less than a tenth of that. While the restructuring appears to have been successful, it all seems to have been on the expense side, with little attention paid to bringing in new money ... and the world has yet to see a company that could cut its way to growth.
Sulzberger & Company, which had hired Goldman Sachs (NYSE: GS) to advise them on the sale, didn't reveal whether the dismal bids were the reason they decided to keep the Globe. But, it's hard to believe that these guys believe in the future of this newspaper. Hopefully, they're just waiting for a better buyer.