New York Times Sells Boston Globe At 93% Loss 178
An anonymous reader writes "The New York Times announced this morning that it has sold the Boston Globe newspaper and related assets, including the Boston.com website and the Worcester Telegram & Gazette daily paper, to John Henry, the principal owner of the Boston Red Sox. The price was $70 million in cash, a small fraction of the $1.1 billion the Times paid to acquire the Globe in 1993, and does not include assumption of the Globe's pension liabilities, estimated at $110 million, which will remain with the Times. Since then the paper's weekday circulation has fallen from 507,000 to 246,000 (including digital), mirroring the declining fortunes of many other daily newspapers across the country. Henry, who also owns the Liverpool FC and various other sports- and media- related properties, made his fortune in the investment industry; however, his hedge fund company recently closed after several years of poor performance."
Re:There goes all the retirement plans! (Score:5, Informative)
There needs to be an immediate lawsuit to take all money from the primary sale and put it to the debt, and the primary debt is the workers/pensions.
Nope. The primary debt is lenders with collateral. There's a queue of creditors who have claim on the debt of a failed business which enters bankruptcy. Pensioners are towards the front, but there are parties ahead of them.
Re:Discount, not loss (Score:5, Informative)
It gets worse... they sold it for -40 million (price minus leftover pensions), but they rejected an offer to buy it a couple of years ago for 300 million (410 million including pensions in that deal) . Apparently they're great at losing money on an investment rapidly....
The Big Picture (Score:5, Informative)
Re:The Boston Globe was insanely left-wing.... (Score:4, Informative)
Something sneaky is going on there. Whether it is a cover up to hide incompetence (which it was all over), a cover up for political purposes, or something even more insidious, something has happened with it.
Even the liberal CNN or the Clinton News Network as it was/is known because of how much it favored President Clinton in it's reporting, is reporting that there was dozens of CIA operatives in Libya when the attacks happened and that several of their reporters were flooded with operatives wanting to tell what happened then all the sudden they clammed up. CNN is reporting that people who were in the country the night Benghazi happened keep getting reassigned and shuffled around to new geographical locations, alias names are being issued to them making it harder for even representatives to find them, they had to re-sign nondisclosure agreements that they have already signed, and many of them are being given lie detector tests every month or two which other CIA operatives claim is very unusual to have them that frequently.
I'm sorry, but you picked the wrong issue to gripe about there as partisan.
Re:Worth less than its debt... (Score:2, Informative)
(I am a pension actuary)
As far as I can tell, they have one pension plan that covers all of their employees and based on its Form 5500 filing (publicly available online) the plan is pretty well funded actually. As of 1/1/2011 they have total Funding Target liabilities of 173,403,797 and assets at market value of 158,880,383. Most plans are in a much worse position because these liabilities (which are used to determine minimum contribution requirements) are now required to be valued using a market interest rate determined by average corporate bond yields, and corporate bond yields are at a 60-year low, which makes the liability go up. After the Pension Protection Act of '07 they have to pay down shortfalls between the Funding Target and the market value of assets over 7 years.
Investment returns were pretty good for 2011 and 2012, so they should be in s similar position for a more recent valuation. Also, since then congress passed a measure to stabilize the interest rates used for valuing funding target liabilities (they now aren't allowed to be more than X% of a 25-year average of the interest rate, where X starts at 85% and then widens over the next few years). Most plans I've seen haven't gotten much better or much worse over the past 2 years.
The Citigroup pension yield curve, a published set of interest rates which many plans use to calculate pension liability numbers for financial statements is in the neighborhood of 5% right now. That means that things will look worse on that basis, although not that much worse.
Interest rates used to calculate annuity prices are at historic lows (around 3%), so the price of buying an annuity to cover each participant's pension benefit would be outrageous though. This may be how they're calculating the pension liability number mentioned there. It's worth noting that these interest rates are especially low due to necessities imposed by insurance company business models which don't really apply to pensions (unless the companies sponsoring those pensions settle the liabilities by annuity purchases).
Re:Why read newspapers? (Score:5, Informative)
Indeed. You would think the daily rag in a state capital would be digging, but the Springfield State Journal-Register [sj-r.com] is close to worthless. From looking at it you would think that every crime, fire, and accident is reported but few actually are. They want you to pay for worthless "news" as well as being subjected to popups, popunders, animated ads and all the very worse, annoying advertising? They're insane. The local TV station, wics, does more investigative reporting. There's a police scandal [wics.com] right now that they uncovered; the daily paper sort of repeats their nightly news of it in the next day's paper.
Meanwhile, we have a weekly paper [illinoistimes.com] that even the paper edition is absolutely free, its advertising is non-intrusive, and it does do investigative reporting. It also has movie reviews, a "pub crawl" section highlighting live music, recipes, etc. The SJ-R no longer has an editorial cartoonist; he was let go in their last round of layoffs. The Illinois Times hired him after the SJ-R layed him off. There are also a couple of syndicated [thismodernworld.com] cartoons.
Traditional newspapers are dead. There's way too much good free news to pay for it, especially when the free is better than the paid.
Fox News not conservative? (Score:4, Informative)
I know that bashing Fox News is a popular opinion. But of the mainstream papers, websites, and news TV stations, it's actually rather moderate.
"Moderate"? Compared to what? There is almost endless evidence [newsmax.com] that Fox News intentionally presents a staunchly conservative viewpoint and they have an audience to match. It's not even a meaningful debate at this point.
You're just as likely to find a liberal view on a panel segment as you are a conservative one.
Just because they invite some token liberals on to some of the shows doesn't mean their coverage is remotely balanced. Fox News is basically a mouthpiece for the republican party. Name one talking head (ala Sean Hannity or Rachel Maddow) on Fox News who is a clear liberal. Go ahead, I'll wait...
Fox News gets its ratings because there are enough liberals and moderates to attract a broad audience.
The audience of Fox News contains a minority of moderates and VERY few liberals. 94% of Fox News viewers [politicususa.com] self identify as republican or republican leaning. In what universe is that a "broad audience"?
Look at who is buying newspapers now. Extreme right and left wing political donators.
Really? [businessinsider.com] Warren Buffet is an "extreme" political donator?