Boston billionaire John Henry is now the largest employer of journalists in Boston after his purchase of the Boston Globe from the New York Times Co. The principal owner of the Boston Red Sox, Henry is buying the Globe, the Worcester Telegram & Gazette and its website, the Globe’s direct mail business and a 49 percent interest in the free Metro Boston newspaper for $70 million, a virtual steal given the $1.1 billion the New York Times paid almost 20 years ago, but as with most major US dailies, the Globe has consistently lost readers, advertising, and status.
“The first thing to note is that he paid more for his second baseman than for the Globe,” commented Lou Ureneck, a journalism professor at BU. As for his investment into the media business, Henry may have to deploy some of his best consumer engagement tactice from the Sox, as traditional revenue streams continue to falter. “Classified advertising is a distant memory, ancient history,” added Ureneck. “Maintaining newspapers—or more importantly the news organizations behind them—is going to be a long and difficult slog, requiring digital products strong enough to attract paying readers.”[more]
As the 141-year-old newspaper changes hands in a fire sale, Henry will be faced with a turnaround that may prove to be more difficult than getting the Red Sox to win a World Championship after an 86-year drought. But Henry is no stranger to challenges. After a pretty dispicable performance in 2011, Henry has managed to rally his Red Sox to No. 1 in the league this season, and has revamped Fenway Park into a modern money-maker. That move alone has shown that Henry is capable of putting community interests first, according to Boston attorney Robert Bertsche. “He’s taking on the immense challenge of owning and operating a newspaper in this day and age,” Bertsche told Reuters. “You have to have the ability to look forward and not look backward and really experiment even if it means putting money behind failed experiment.”
The biggest challenge for Henry, and all other newspaper execs, is convincing readers to pay online subscription fees, which the Globe instituted in 2011. While viewership has seen an uptick in the last year, circulation is nowhere near levels from the early 2000s. With a paywall up and running, Henry will need to focus on online ad dollars as well as improved mobile content access.
The Times, which put the paper and its associated assets up for sale back in February, will get less than 7 percent of the fee it paid when it purchased the media outlets in 1993. But the Times Co. isn’t the only one losing big on media investments. In 2012, Philadelphia’s two largest newspapers sold for $55 million, a fraction of the $515 million that several local investors paid out for the brands in 2006. And most recently, the Tribune Company announced that it is selling off its print media brands, including the Los Angeles Times, the Baltimore Sun and the Chicago Tribune—sales which have also attracted several local buyers—one of the main reasons why Henry’s lower bid for the Globe won out.
With the risky purchase, Henry is hoping to preserve 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,” he said in a statement. Let’s hope he can keep it that way.