POSTED: 08:25 a.m. HST, Aug 03, 2013
LAST UPDATED: 01:57 p.m. HST, Aug 03, 2013
BOSTON » Businessman John Henry, the principal owner of the Boston Red Sox, has entered into an agreement to buy The Boston Globe for $70 million, a massive drop from its record $1.1 billion price two decades ago.
The impending purchase from The New York Times Co. marks Henry's "first foray into the financially unsettled world of the news media," the Globe said today. The deal will give Henry the 141-year-old newspaper, its websites and affiliated companies, it said.
The Times announced in February it was putting the Globe and related assets up for sale four years after calling off a previous attempt to sell it. The company's CEO said at the time selling the Globe would help the company focus attention on The New York Times brand.
Times spokeswoman Eileen Murphy confirmed the planned sale of the Globe and other media properties to Henry. The Times said the all-cash sale, expected to close in 30 to 60 days, includes BostonGlobe.com, Boston.com, The Worcester Telegram & Gazette, Telegram.com, the direct mail marketing company Globe Direct and the company's 49 percent interest in Metro Boston, a free daily newspaper for commuters.
Henry cited the "essential role that its journalists and employees play in Boston, throughout New England, and beyond."
"The Boston Globe's award-winning journalism as well as its rich history and tradition of excellence have established it as one of the most well respected media companies in the country," Henry said in a statement.
Henry, who also owns the English Premier League soccer club Liverpool F.C., said he would reveal details about his plans for the Globe in the next few days.
Globe editor Brian McGrory said the newspaper's Red Sox coverage and its editorial decisions won't be affected by the sale.
"We have no plans whatsoever to change our Red Sox coverage specifically, or our sports coverage in general, nor will we be asked," McGrory told the newspaper. "The Globe's sports reporting and commentary is the gold standard in the industry."
The Times bought the Globe from the family of former Globe executive Stephen Taylor in 1993 for what it said was the highest price paid for an American newspaper. The price Henry is paying is less than 7 percent of the 1993 price.
The Globe and other newspapers have faced difficulties in recent years as readers have fled to the Internet and advertisers have cut spending on newspapers and moved more ads online. Still, the Globe is a journalistic institution in New England and was lauded for its coverage of the deadly Boston Marathon bombings in April.
A 2009 round of cost-cutting, involving pay cuts, helped put the Globe on better financial footing and prompted the Times to call off a planned sale. In late 2011, the Globe started charging for access to its online version at BostonGlobe.com, which helped to boost circulation revenues.
The Times company doesn't separate Globe revenue from The New York Times revenue in its financial statements. But the Globe had an average weekday circulation of 230,351 in the six months through September, according to the Alliance for Audited Media. The newspaper's increase in digital subscriptions more than offset declines in print. But the total is still down significantly from the nearly 413,000 it boasted in September 2002.
The Globe isn't the only newspaper to see a huge drop in its price at sale time.
In April 2012, Philadelphia's two largest newspapers sold for $55 million, a fraction of the $515 million paid by a group of investors in 2006. The buyers of the Philadelphia Inquirer and Philadelphia Daily News included influential New Jersey Democrat George Norcross III, former New Jersey Nets owner Lewis Katz and cable TV mogul H.F. "Gerry" Lenfest.