Red Sox Owner John Henry "entered into an agreement early Saturday to buy The Boston Globe, a deal that will put the 141-year-old newspaper, its websites, and affiliated companies into the hands of a personally shy businessman with a history of bold bets," according to Beth Healy of the BOSTON GLOBE. The impending purchase for $70M "in cash marks Henry’s first foray into the financially unsettled world of the news media." Henry said that he "would disclose more details about his plans for the company in coming days." He added, "This is a thriving, dynamic region that needs a strong, sustainable Boston Globe playing an integral role in the community’s long-term future." Healy reported Henry "bested a field of more than a half dozen bidders." He also will "acquire the Worcester Telegram & Gazette newspaper and its website, as well as the Globe’s direct mail business and a 49 percent interest in the Metro Boston commuter newspaper." The deal brings "under one owner two Boston institutions that have been connected before." The Times Co. owned a minority 17.5% stake in the Red Sox from '02-12, "reaping a $150 million profit on the investment." The deal is "sure to spark debate in journalism circles and among Globe readers about whether the Globe’s coverage of the Red Sox, which regularly includes critical commentary, will be affected." Globe Editor Brian McGrory said, "We have no plans whatsoever to change our Red Sox coverage specifically, or our sports coverage in general, nor will we be asked. The Globe’s sports reporting and commentary is the gold standard in the industry." The Times Co. is selling the Globe for far less than the $1.1B it paid for the paper in '93, "when the business was highly profitable and the Globe fetched a record price" (BOSTON GLOBE, 8/4).
DEPRECIATED VALUE: In N.Y., Christine Haughney noted the sale returns the Globe "to local ownership after two decades in which it struggled to stem the decline in circulation and revenue." But the sale price represents "a staggering drop in value for The Globe." Henry is buying the media group "without partners through his acquisition company; under terms of the sale, he does not have to assume The Globe’s pension liabilities." The all-cash sale is "expected to close in 30-60 days" (N.Y. TIMES, 8/4). In L.A., Andrea Chang wrote the "low price underscores the continued troubles plaguing the newspaper publishing industry as advertisers spend less on print and readers turn to free online content" (L.A. TIMES, 8/4). The BOSTON GLOBE's Healy noted Henry "prevailed over a half-dozen rival bidders for two main reasons: He was rooted in Boston and had plenty of cash." Henry said, "I became concerned a number of years ago about the continued viability of our newspapers in Boston. I sat with various publishers and, in studying the challenges newspapers face across the country, I became extremely interested in potential solutions." Sources added that while Henry is "paying cash for the company, it’s likely that he would consider taking on minority partners in order to reduce his own stake and include other locals in his plans." Other "possible investors" include Red Sox Chair Tom Werner and Celtics Managing Partner Steve Pagliuca (BOSTON GLOBE, 8/4).
HENRY NOT THE HIGHEST BIDDER: The BOSTON GLOBE's Healy reports three of the groups that lost out in the bidding for the paper said that their offers "were higher than" Henry’s winning $70M bid, prompting them "to question the New York Times Co.’s sales process." BusinessWest magazine publisher John Gormally said, "The process was not transparent at the end to the bidders." Several bidders have "suggested that Henry may have to get government approval to own both" NESN and the Globe. Henry said, "Now that I have a prospective role in Globe leadership, if I were foolish enough to try to influence Sox coverage by the Globe, I would only succeed in diminishing the value of both great institutions" (BOSTON GLOBE, 8/5). San Diego Union-Tribune CEO John Lynch said, "We bid significantly more than Henry. At the end of the day, I’m certain our bid was higher and could have been a lot more higher if they had just asked." He also "questioned whether control over the Globe’s sports pages could help the Sox at other sports teams’ expense." Lynch: "Someone in the Red Sox at one juncture told me there are two organizations they hate -- the Yankees and the Patriots -- and they didn’t want the Patriots to get the Globe. They certainly can influence the coverage a team has" (BOSTON HERALD, 8/4). Gormally said that his was "the highest-end" $80M offer. He added, "I think The New York Times intended to sell this to John Henry no matter what. If they had sold it to anyone else, the story would have been, 'Times loses 1 billion dollars of stockholder value.' By selling it to John Henry the story then becomes, 'Red Sox owner saves Globe" (BOSTON HERALD, 8/5). In N.Y., Haughney & Carr note the reaction to the sale around Boston "was cautiously optimistic" (N.Y. TIMES, 8/5).
CONFLICT OF INTEREST? In N.Y., Peter May wrote under the header, "Red Sox Owner's Purchase Of Boston Globe Worries Journalists." Boston Globe columnist Bob Ryan said, "This was the last circumstance anyone would want. It's nothing anyone would wish. It's scary, to say the least." May noted the news that Henry was acquiring the Globe "resonated most profoundly in its sports department." Globe Sports Editor Joe Sullivan said that the newspaper "might need to include disclaimers when writing about Henry, as it did when The Times had an ownership stake in the team for 10 years." Globe Columnist Dan Shaughnessy said, "All we can hope for is that everyone is allowed to do his job professionally and that we are able to keep our independence." The Red Sox have received "mostly positive coverage in The Globe since Henry’s group bought the team" (N.Y. TIMES, 8/4). Newsonomics analyst Ken Doctor said, "The problem is that no matter what the Globe does, readers are going to wonder about the credibility of the Red Sox coverage." Boston Univ. journalism professor Lou Ureneck: "Will the Boston Globe become an extension of the Red Sox public relations machine? That would be my big concern" (BOSTON HERALD, 8/4).
NEED FOR OBJECTIVITY: In Boston, Abel & Panzar noted Henry buying the Globe has "sparked a mix of optimism and concern from civic leaders to fans of both the team and the paper." Former Boston Mayor Raymond Flynn said that he had "heard some doubts and questions, from whether the 141-year-old newspaper would continue to challenge the Red Sox about its perennially steep ticket prices and question the team’s commitment to remaining in the championship hunt." Others "worried about Henry acquiring too much power in town" (BOSTON GLOBE, 8/3). BOSTON SPORTS MEDIA WATCH's Bruce Allen wrote the sale to Henry "makes sports coverage in this town a whole lot more complicated, and pretty much all coverage of the Red Sox will be viewed as coming from a certain vantage point." Coverage of the other local teams also will "be in question as to whether it is hurting or helping the aims of the owner and his other investment" (BOSTONSPORTSMEDIA.com, 8/2). USA TODAY's Rem Rieder writes, "Let's hope Henry is disciplined enough to let his new acquisition cover his older one the right way" (USA TODAY, 8/5). In Boston, Howie Carr wrote the "first thought that comes to mind" about Henry's purchase of the Globe is that there is "a sucker born every minute" (BOSTON HERALD, 8/4).
A UNIQUE CHALLENGE: In Boston, Ross & Borchers wrote besides the "obvious difficulties of running a struggling company in a volatile industry, Henry faces a challenge unique to this purchase: ensuring the Globe continues to provide objective coverage of his baseball team." Henry like any sports owner has "periodically chafed at the treatment of his team by local news media, and the Globe’s coverage of the Red Sox’s epic 2011 collapse particularly rankled him." Former ad exec Jack Connors, who also bid for the Globe, said, "I don’t think he’s going to dictate. John is very analytical. He loves data and he loves modern technology, and I think you’ll see him want to make investments on the dot-com side." The Celtics' Pagliuca said that Henry "may be interested in a multimedia approach, involving NESN and Globe sports coverage." He added, "There could be mutual benefits for the television property and the news operation to combine forces" (BOSTON GLOBE, 8/3). USA TODAY's Rick Jervis writes Henry's purchase is "the latest headline-grabber in the life of the sports-loving billionaire equally described as a tough negotiator, impulsive leader and gentle manager." Those who know Henry said that his management style is "equal parts quiet consensus builder and detail-oriented." Padres President & CEO Mike Dee, a former Red Sox COO, in a '11 Boston Globe profile of Henry said, "His quiet nature would sometimes confuse people. When he truly wants to get something done, he'll put his mind to it and find a way to get it done" (USA TODAY, 8/5).
