Full disclosure: The hardreading staff forgot to get an MBA, so we might be off in this analysis. But the two bids to buy the Boston Herald clearly have very different interests at heart.
Start with the new offer from Revolution Capital Group, as described today by Herald reporter Brian Dowling.
Second potential buyer makes offer for Boston Herald
A Los Angeles investment group is pledging a $5.75 million bid for the Boston Herald, the second public bid for the tabloid since it filed for bankruptcy in December.
Revolution Capital Group filed its bid yesterday with the federal bankruptcy court in Delaware. The company previously offered to buy the Herald in 2013.
Components of Revolution’s bid add up to more than the $5 million offer that newspaper giant GateHouse Media made last month.
But it’s not just more – it’s who gets more. “Revolution is offering $3 million cash for the company, agreeing to honor $750,000 of paid time off for employees who join the company, and is pledging to pay out $2 million in severance.”
Crosstown at the Boston Globe, Jon Chesto reminds us what the deal is with GateHouse.
GateHouse proposed paying $4.5 million in cash, as well as at least $500,000 in assumed liabilities, including paid time off owed to employees.
Unless our math skills fail us, that means Herald owner Pat Purcell gets $1.5 million less from a sale to Revolution, while employees at the shaky local tabloid get $2.25 million more.
Maybe that’s why “[the] new bid drew immediate praise from the Communications Workers of America, which represents more than 100 unionized workers at the Herald,” according to Chesto.
But Poynter Institute media business analyst Rick Edmonds points to Revolution’s acquisition of the Tampa Tribune in 2012, which it then sold to Poynter, owner of the Tampa Tribune, four years later. Edmonds told Chesto he thinks Revolution would likewise flip the Herald in a few years.
Long-term, Edmonds said, “[GateHouse does] make cuts themselves, and they have profit targets that they’re trying to hit. [But] they have a body of resources and competence that I don’t think Revolution Capital has.”
It’ll be interesting to see how the bankruptcy judge sorts that out.
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