In Boston Herald Sale, Employees Are the Wishbone

January 3, 2018

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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Globe Herald Hostage (Lowball Edition)

July 13, 2013

Once again the Boston Herald is a day late, but it’s the dollar short that’s interesting.

Yesterday’s Boston Globe featured this update on the sale of the paper:

Field of bidders for Globe reportedly narrows

Groups with local ties – Taylor family Henry, equity group – remain in contention

At least three investor groups with local ties apparently remain in contention to buy The Boston Globe and its related businesses, according to people briefed on the matter.

The narrowed field of bidders includes members of the Taylor family that formerly owned the Globe; Boston Red Sox owner John Henry; and Robert Loring, a Massachusetts native who owns the Tampa Tribune, said people briefed on the process.

The owner of the U-T San Diego newspaper is a possible fourth finalist, but the status of the bid could not be confirmed Thursday.

 

And then the money quote: “The competing bids range from $65 million to $80 million, according to the people briefed on the matter.”

Here’s how that translates into Heraldese:

Boston GlobeBids in for Globe – and they’re low

With bids reportedly at a disappointing $65 million to 
$80 million, The Boston Globe’s impending sale is shaping up as more of a real estate deal than a newspaper buy, experts said yesterday, even as one of the four purported finalists told the Herald they’ve lost interest in the broadsheet.

“The implication is kind of obvious that the Globe as a straight business venture is not very highly valued on the market right now because clearly that amount is probably — at least the majority of it, maybe more — is valued land and the building,” said Rick Edmonds, a media business analyst for the Poynter Institute.

 

Ouch. It’s true that estimates of the New York Times Co.’s local media group – the Globe, its websites boston.com and bostonglobe.com, and the Worcester Telegram & Gazette – were running between $70 million and $120 million, so the current bids aren’t good news. It just hurts twice as much coming from the Globe’s crosstown rival.

And the feisty local tabloid had even more bad news for the Globeniks: “U-T San Diego CEO John Lynch told the Herald they’re out of the running.”

And then there were three.