US--Boston Globe Future

The New York Times Co. appears interested in getting rid of the Boston Globe, hiring investment bank Goldman Sachs to manage a potential sale of a newspaper that has plummeted in value since its purchase in 1993, the Globe reported Wednesday.

The Globe, citing two potential buyers it did not name, said Goldman Sachs would request bids for the 137-year-old newspaper in the next couple of weeks. The Times Co. previously announced it had hired the investment bank to sell its 17.5% stake in the Boston Red Sox and related sports properties.

A Globe spokesman declined to comment Wednesday, and a Times Co. spokeswoman said the company does not comment “on rumors concerning potential acquisitions or divestitures.”

The Times Co. recently renegotiated contracts with most of the Globe unions, saying it needed $20 million in annual savings and the elimination of lifetime job guarantees or it could be forced to close the newspaper.

The Globe has been dramatically affected by the recession, the advertising downturn and the migration of readers to the Internet, with $50 million in operating losses in 2008 and a projected $85-million loss this year.

Its average weekday circulation dropped nearly 14% to 302,638 compared with the previous year. Sunday circulation fell more than 11% to 466,665.

The Globe’s largest union, the Boston Newspaper Guild, narrowly rejected a contract proposal Monday with $10 million in annual cuts to pay and benefits.

It filed an unfair-labor complaint with the National Labor Relations Board on Tuesday after the Times Co. immediately imposed a 23% pay cut to achieve the $10 million in annual savings.

Goldman Sachs had told interested parties it would accept bids regardless of whether the guild approved new terms to replace an existing contract that expires at the end of the year.

“The New York Times has indicated to interested buyers that once the June 8 vote had taken place, once everybody knew what was going to happen -- up or down -- they would expect bids a couple weeks later,” the Globe quoted one interested buyer as saying.

The Times Co. bought the Globe in 1993 for $1.1 billion -- the highest price ever paid for a single U.S. newspaper -- from the Taylor family, who had controlled the newspaper for more than a century. Now some industry analysts say the Times Co. is trying to make the Globe leaner and more attractive for potential buyers -- at far lower prices.

In 2006, the Times Co. rejected a proposal from retired General Electric Co. Chief Executive Jack Welch and others to buy the Globe.

At the time, the newspaper was valued at $550 million to $600 million. In a December research note, Barclays Capital credit analyst Hale Holden valued the Globe at $12 million to $20 million.