Boston Globe Scoops the Herald on Herald Sale

February 15, 2018

For the past several months, the Boston Globe has been playing catch-up to the Herald in covering the sale of the feisty local tabloid.

Today the Globe caught up.

Under the unusual byline “Globe Staff,” the stately local broadsheet reported the details of yesterday’s bake sale.

Bidding for Herald jumped by millions at auction

Digital First Media is poised to become the new owner of the Boston Herald after besting competitors with multiple higher bids during a bankruptcy auction Tuesday that netted nearly $12 million, according to newly filed court documents.

A transcript of the auction held in the office of Herald law firm Brown Rudnick revealed that Digital First opened with a bid valued at around $7.6 million — higher than the offers already in place from two other competitors, GateHouse Media and Revolution Capital Group.

After GateHouse countered Digital First with a slightly higher offer, Revolution Capital dropped out, leaving the two competitors to trade bids several times until Digital First’s final offer proved too rich for GateHouse, according to a transcript of the auction filed with bankruptcy court in Delaware.

 

And Digital’s final offer? “The Denver-based company, which owns daily and weekly newspapers in Colorado, California, Massachusetts, and several other states, prevailed with a final offer of $9.6 million in cash, $1 million in accrued paid time off to employees, and another $1.4 million in assumed liabilities.”

Crosstown at the Herald, reporter Brian Dowling didn’t have those numbers, but he did spotlight what exactly that breakdown means.

This year, the pension, severance and retirement payments to employees were estimated to reach $3.5 million, according to court papers. The pension, severance and retirement accounts had accrued nearly $25 million in liabilities when the company filed for bankruptcy.

 

Obviously $2.4 million isn’t gonna put much of a dent in that. Dowling also reported that Boston Mayor Marty Walsh is “urging Herald ownership to strike a deal to save workers’ pensions.”

All due respect, Mistah Mayah, the corn is off the cob – unless the bankruptcy judge steps in to change the deal. We’ll find out tomorrow.

Advertisements

Who Knew the Boston Herald Was Worth $12 Million?

February 14, 2018

Eat your heart out, Mort Zuckerman.

Back in September, the real estate magnate sold the legendary New York Daily News to Tronc (rhymes with bonk) for exactly $1 – 50¢ less than the price of the paper’s Sunday edition.

(To be fair graf goes here)

To be fair, Tronc did assume $30 million in operational and pension liabilities, but hey – a dollar’s a dollar, yeah?

Boston Herald owner Pat Purcell, on the other hand, scooped up a helluva lot more in yesterday’s bake sale of the shaky local tabloid.

From Brian Dowling’s piece in today’s edition of the soldy local tabloid:

Digital First Media enters $11.9M top bid for Boston Herald

Digital First Media won the Boston Herald in a 5-hour bankruptcy auction with a top $11.9 million bid that all but settles who will carry the news organization into the next chapter of the city’s media history.

The newspaper company, which operates as Media News Group and owns hundreds of publications across the country, including the Denver Post, bested two other suitors — GateHouse Media and Revolution Capital. Digital First also owns the Lowell Sun and the Fitchburg Sentinel & Enterprise in Massachusetts.

 

But that doesn’t mean it’s all roses and lollipops at Fargo Street. As the Boston Globe’s Jon Chesto reports, Digital First Media “has earned a reputation for relentless cost-cutting” – not a good omen for the Herald rank and file.

And, as our kissin’ cousins at One-Daily Town recently noted, Digital First just ditched the Sentinel & Enterprise’s brick-and-mortar home for a “virtual newsroom.”

So maybe you Heraldniks might want to bring some of your personal items home.


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.