Red Sox owner to buy Boston Globe from New York Times for $70m
John W Henry, who also owns Liverpool FC, to take struggling paper for fraction of the $1.1bn Times paid for it in 1993
John W Henry owns the Boston Red Sox and Liverpool FC. Photograph: Steven Senne/Associated Press
The New York Times Company is to sell the Boston Globe to John W Henry, the principal owner of the Boston Red Sox and Liverpool FC, it was announced on Saturday.
In a sign of the newspaper industry's continued struggles, Henry is expected to pay $70m for the Globe, its websites and associated businesses – a fraction of the price the Times paid for the newspaper two decade ago. In 1993, the Times paid $1.1bn – a record price for an American newspaper - for the then-profitable title, taking it out of the hands of a family that had owned it since 1873.
The Globe's article announcing the news described Henry as "a personally shy businessman with a history of bold bets". He said in a statement to the newspaper: "This is a thriving, dynamic region that needs a strong, sustainable Boston Globe playing an integral role in the community's long-term future."
The 63-year-old, who was born in Illinois, lives in the Boston area. He made his fortune in finance as a commodity trader. The Wall Street Journal reported that his firm managed more than $2.5bn in 2006 but struggled in recent years and decided to stop managing clients' assets at the end of 2012.
Henry's two blue-chip sports properties have also faltered lately. He headed an ownership group that bought the Boston Red Sox in 2002, along with the New England Sports Network cable television channel, for $660m - then a record sum for a Major League Baseball franchise. TheNew York Times Company was part of that group, owning a reported 17.5% share of the Red Sox. In May 2012, the Times said it had sold its remaining stake in the Fenway Sports Group for $63m.
Henry attracted praise for choosing to keep and renovate the club's historic Fenway Park rather than build a new stadium, and in 2004 the team won the World Series for the first time since 1918. The Red Sox won the Series again in 2007 but they have not been back since and have struggled in recent seasons.
In 2010, Henry's New England Sports Ventures, later renamed the Fenway Sports Group, bought Liverpool FC. But despite heavy spending on players the club have not come close to challenging for the Premier League title and stadium redevelopment issues have dragged on.
The Globe, which was founded in 1872, appeared to be on the brink of closure four years ago. The Times threatened to close it in 2009, because of heavy losses, and put it up for sale. It could not find a suitable taker and decided to keep the paper after cost-cutting and union concessions that included reducing employee wages and benefits.
Under Mark Thompson, its president and chief executive officer and a former director general of the BBC, the Times is focusing on bolstering its international profile and on finding ways to charge for web content. It will rebrand the International Herald Tribune as the International New York Times in the autumn and in February it once again sought buyers for the Globe, as it continued its efforts to streamline its formerly sprawling and diverse media empire.
Thompson, who joined the Times last year, said in a statement: "We're delighted to have found a buyer in John Henry, who has strong local roots and a deep appreciation of the importance of these publications to the Greater Boston community. 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."
According to the Times, Henry is buying the paper and its assets without business partners, paying cash and not assuming pension liabilities.
The Times reported on Thursday that its net income rose to $20.1m in the second quarter of this year thanks to lower operating costs and stronger circulation revenue, compared with a loss of $87.6m in the same period last year. But print advertising at the Times, the Globe and the Tribune fell by 6.8% and digital advertising by 2.7%.
In 2009, the Boston Globe appeared to be on the brink of closure.
Figures from the Alliance for Audited Media suggest that digital subscriptions are driving a circulation rise at the Globe. Its weekday circulation for a six-month period ending in March was 245,572, the highest since 2009. That ranked it 24th among paid-for newspapers in the US. But its circulation has roughly halved in a decade.
The sale also includes the Worcester Telegram & Gazette and its website, the direct mail company Globe Direct and a 49% stake in Metro Boston, a freesheet.
The publisher of the Philadelphia Inquirer and Philadelphia Daily News sold the papers to local investors last year for around $55m - $460m less than another group paid for them in 2006. The Tribune Company, which owns the Los Angeles Times and the Chicago Tribune, among other newspapers, emerged from bankruptcy on 31 December last year and last month announced plans to spin off its newspaper businesses into a separate company.
Not everyone is pessimistic about the future of newspapers. Warren Buffett, the celebrated investor, bought his hometown paper, the Omaha World-Herald, for $200m in 2011 and said it was "a reasonable investment". His company, Berkshire Hathaway, now owns dozens of daily newspapers, mainly small publications focused on local communities. Last month, Buffett added a New Jersey newspaper with 67,000 readers, The Press of Atlantic City, to his portfolio.
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