Stunner of the day: Globe worth just $20 million?

Published Dec 25 2008, 07:35 PM by Adam Reilly

The news that the NYT Co. is trying to sell its stake in the Red Sox is interesting. But what really struck me about today's Wall Street Journal story was the little tidbit relegated to the end of the fifth graf:

It is possible the Globe could be packaged with the sports assets in a sale. Jack Connors, a former ad executive in Boston, and former General Electric Chief Executive Jack Welch took a serious look at the Globe two years ago, valuing it at $550 million to $600 million, people close to them said at the time. Times Co. rebuffed the inquiries. The Globe was recently valued by Barclays at $20 million [emph. added].

!!!

Granted, the Globe isn't worth what it used to be. But this can't be right. Can it?

I've done some quick Googling, and I can't find any reports of the $20 million Barclays valuation that seem independent of the WSJ article. Really, my hunch is that this is a typo. But if it isn't--and if the Boston Business Journal's recent report that the Globe is losing close to $1 million a week was correct--then the Globe could be in for an extremely ugly 2009.*

I'll try to get comment from the Globe and/or NYT Co. tomorrow; if I succeed, I'll post an update.

*NOTE: I originally wrote that, if reports of both the valuation and weekly loss rates are right, the Globe could soon have negative value for the NYT Co. But I don't think that's correct. Certain Globe assets, like real estate, will retain their value, even if the paper's expenses keep outstripping its revenues. The key for the NYT Co. will be finding a way to balance expenses and revenues--which is where the aforementioned ugliness comes in.

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6 Comments

Peter Porcupine said:

I'm betting two hundred instead of twenty, but still. Two thirds of its value.

December 25, 2008 11:35 PM
Cynic said:

I found it amusing that Todd Wallack's <a href="www.boston.com/.../a> of this story for the Globe somehow dropped the discussion of the paper's valuation or potential sale from the story. Great job, Todd. That's the kind of hard-hitting journalism we all expect from the Globe.

Maybe it's a typo, and it should read $200 million. But frankly, it's tough to see anyone ponying up a nine-figure sum with the credit markets frozen, the ad market in free-fall, and revenues plunging. Who'd finance such an acquisition?

December 26, 2008 9:13 AM
jfzworld said:

NTY paid $1.1 BILLION for Globe in '93. That $20m figure in the WSJ story would mean that the paper is now worth less than 2% of what the Times paid. Almost unfathomable, even for a rotten biz like daily newspapers. Barclays estimate must be $200m. Either way, the game's over.

December 26, 2008 9:51 AM