Two of the biggest names in United States newspaper publishing have announced agreements to sell substantial assets within the same week.
First, the New York Times Company announced the sale of New England Media Group to an acquisition company owned by John W. Henry. $70 million in cash would be exchanged for The Boston Globe, BostonGlobe.com, Boston.com, Worcester Telegram & Gazette, Telegram.com, GlobeDirect (the Globe’s direct mail marketing company) and a 49 percent interest in Metro Boston.
John W. Henry is the principal owner of Fenway Sports Group, which is the parent company of the Boston Red Sox and Liverpool F.C.. FSG was founded in 2001 as New England Sports Ventures when John W. Henry joined forces with Tom Werner, Les Otten, The New York Times Company and other investors to successfully bid for the Red Sox. NESV changed its name to Fenway Sports Group in March 2011.
Mr Henry said of the deal to purchase the Boston Globe:
“[The] announcement by The New York Times Company should make it clear exactly how strongly I feel about the New England Media Group – The Boston Globe, The Worcester Telegram & Gazette and Metro Boston – and the essential role that its journalists and employees play in Boston, throughout New England, and beyond…
“…This is a thriving, dynamic region that needs a strong, sustainable Boston Globe playing an integral role in the community’s long-term future. In coming days there will be announcements concerning those joining me in this community commitment and effort.”
Mark Thompson, president and CEO of The New York Times Company explained the sale thus:
“As a result of this agreement, we will be able to sharpen our company focus on and investments in The New York Times brand and its journalism.”
The New York Times Company had just announced increased operating profits of $53.4 million in the second quarter of 2013 compared with $44.1 million in the same period of 2012. The performance was led by an increase in digital subscriptions. The company is planning a re-brand of the International Herald Tribune as the International New York Times in late 2013. The second-quarter 2012 results included a $37.8 million ($22.0 million after tax or $.15 per share) gain on the sale of the Company’s remaining 210 units in Fenway Sports Group.
Two days later, The Washington Post Company announced that it was selling to Jeffrey P. Bezos, the founder and CEO of Amazon, Inc.. The $250 million sale includes The Washington Post, Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.
Donald E. Graham, Chairman and CEO of The Washington Post Company and whose grandfather, Eugene Meyer, bought The Washington Post newspaper at a bankruptcy sale in 1933, commented on the sale:
“I, along with Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post (after a transaction that would be in the best interest of our shareholders). Jeff Bezos’ proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post.”
In a statement on the Washington Post website, the paper reported:
“For much of the past decade, The Post has been unable to escape the financial turmoil that has engulfed newspapers and other “legacy” media organizations. The rise of the Internet and the epochal change from print to digital technology have created a massive wave of competition for traditional news companies, scattering readers and advertisers across a radically altered news and information landscape and triggering mergers, bankruptcies and consolidation among the owners of print and broadcasting properties…
“…Bezos, 49, will take the company private, meaning he will not have to report quarterly earnings to shareholders or be subjected to investors’ demands for ever-rising profits, as the publicly traded Washington Post Co. is obligated to do now. As such, he will be able to experiment with the paper without the pressure of showing an immediate return on any investment. Indeed, Bezos’s history of patient investment and long-term strategic thinking made him an attractive buyer.”
Mr. Bezos has asked Katharine Weymouth, CEO and Publisher of The Washington Post; Stephen P. Hills, President and General Manager; Martin Baron, Executive Editor; and Fred Hiatt, Editor of the Editorial Page to continue in their roles.
Slate magazine, TheRoot.com and Foreign Policy are not included in the sale and will remain with The Washington Post Company, as will the WaPo Labs and SocialCode businesses, the Company’s interest in Classified Ventures and certain real estate assets, including the headquarters building in downtown Washington, DC. The Washington Post Company, which also owns Kaplan, Post–Newsweek Stations and Cable ONE, will be changing its name in connection with the transaction; no new name has yet been announced.