* Globe unions face Friday deadline to make concessions
* A potential buyer expresses interest
* Circulation declines underline stubborn problems
(Repeats with no changes to text)
By Jason Szep and Ross Kerber
BOSTON (Reuters) - Advertisements for The Boston
Globe boast that a single news story can "take you away." But
after Friday, the newspaper itself may be taken away and shut
down after 137 years of publication.
The New York Times Co, which bought the Globe for
$1.1 billion in 1993, threatened at the start of April to shut
the money-losing, award-winning broadsheet unless the paper's
13 unions agree by Friday to $20 million in concessions.
As the deadline approaches, the future of one of America's
most acclaimed regional newspapers looks unclear, illustrating
deepening problems for an industry that has few answers for an
accelerating, long-term shift of advertising to the Internet.
Names of potential buyers have surfaced only to disappear
nearly as quickly, some worrying about finding a profitable
financial model for a newspaper that won 20 Pulitzer Prizes and
dominates news coverage in the six-state New England region but
has faced steep drops in circulation.
"It's like trying to catch a falling knife," said Jack
Connors, the former head of Boston ad agency Hill Holliday who
was part of an attempt to buy the paper several years ago.
"I'm not a buyer" because of the Globe's uncertain
financial situation, he added. "I don't know whether there's an
economic reason to own it."
The Globe was on track to lose $85 million this year unless
changes are made, according to the Times Co. That follows
losses of $50 million last year, red ink that is buffeting the
Times Co, which ended 2008 with $1.1 billion in debt. When the
Times bought it, the Globe was one of the most profitable
newspapers in the United States.
But many U.S. newspapers have lost 20 percent or more of
their advertising revenue as readership shifts to online news.
The Globe's average weekday circulation, for example, fell 14
percent to 302,638 for the six months to March 31 from a year
earlier, according to the Audit Bureau of Circulations.
The Globe has described plans to improve revenue by raising
prices and through new digital advertising efforts. But if it
were closed, it would be the most prominent of the big city
American newspapers to shutter, including EW Scripps Co's
Rocky Mountain News and the print edition of Hearst
Corp's Seattle Post-Intelligencer, which were shut this year.
"It would be a terrible loss," said lifelong Globe reader
Kathryn Kirshner, a psychologist in Brookline, Massachusetts.
"It covers Boston and New England news in a profoundly
important way, uncovering things that are bad and wouldn't be
Massachusetts senators Edward Kennedy and John Kerry and
nine of the state's 10 members of the House of Representatives
sent a letter this week to Times chairman Arthur Sulzberger
Jr., urging that a solution be found to prevent closing the
A Globe spokesman was not immediately available for
Principal Boston Red Sox owner John Henry, a prominent
hedge fund manager often mentioned as a possible suitor, is not
in talks for the Globe, the baseball team said on Thursday,
adding that neither Red Sox Chairman Tom Werner nor any team
affiliates are in discussions to purchase the paper.
A source familiar with the situation told Reuters earlier
in the week that Henry is looking at taking control of the
Globe as part of a deal to buy the Times Co's 17.75 percent
stake in New England Sports Ventures, which owns the Red Sox.
Henry owns most of New England Sports Ventures.
Thursday's Red Sox statement did not address if the parties
could be interested in a future deal. Some suggest the Times
Co's threat may be a negotiating tactic to win lasting
cost-cuts at the paper as the Times strives to shed debt.
Negotiations for a buyer, some suggest, could begin if the
Times Co wins union concessions, which could include pay cuts
of as much as 20 percent, removal of seniority rules and
lifetime job guarantees, and millions of dollars in cuts to
company contributions for retirement and health plans.
"I'd be interested in buying the paper," said Christopher
Egan, managing member of Carruth Capital, a Westborough,
Massachusetts real estate and investment company, and son of
Richard Egan, co-founder of data storage giant EMC Corp
"There's value in the Boston Globe brand, in the Sox and
the website," he said, referring to the newspaper's Boston.com.
However, he added that "I have no guess what it's worth" and
said he hasn't reviewed the books or been approached by any
representatives. "I don't think the New York Times knows what
it wants to do with it yet. They can't sell it without
restructuring the union contracts," he said.
Egan, who calls himself a "former Globe employee" for
having delivered the paper as a boy, previously explored buying
New England radio and television stations.
Inside the Globe newsroom, staffers are anxious about the
negotiations. "We're all worried, and we all want what's best
for The Globe," said business reporter Jenifer McKim.
Union officials declined to comment for this story.
If the Globe survives, its owner face the same stubborn
questions dogging publishers worldwide, such as whether readers
will ultimately pay for news online -- a business model that
has its share of skeptics.
"If that happens someone else will find a way to provide
that news for free," said Jonathan Marcus, a former editor of
Boston Magazine who teaches journalism at Boston College.
"Once a newspaper begins to charge for content, people will
begin to read another newspaper. And once all the newspapers
to charge for content, someone else will find a way to furnish
content for free."
(Additional reporting by Robert MacMillan and Ben Klayman;
Editing by Phil Berlowitz)
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