John Henry Faces T&G Labor Dispute And Globe Toxic Waste
Wednesday, October 23, 2013
This summer, the billionaire Henry - one of three primary owners of the Red Sox - agreed to buy the T&G and Globe for a total of $70 million in cash. That’s only about 5 percent of the price that the New York Times paid when it bought the two papers and their properties almost 20 years ago.
At first, it seemed like a great deal for Henry. But Judge Shannon Frison, of Worcester Superior Court, had other ideas, as she demonstrated, last Friday, by freezing the sale “until further order of this court,” according to Telegram & Gazette reporting.
Her decision came on the very same day that the Times was reportedly scheduled to complete its sale of the T&G and Globe properties to Henry.
'Creative accounting' alleged
Judge Frison’s action came in an ongoing, four-year-old class-action suit filed against the T&G by independent newspaper carriers, who maintain they should be treated as employees instead of as independent contractors. Previously, a Gardner District Court judge and, subsequently, the state Appeals Court ruled in favor of the carriers.
Judge Frison has set $60 million as the "maximum end" of any settlement agreement. That means almost all – if not all - of the $70 million that Henry has agreed to pay the Times could be put into escrow until the civil suit is resolved.
The independent carriers are furious over the fact that the $70-million price tag represents less than one-fifth of the $380 million in revenue that Times’ New England Media Group, of which the T&G and Globe are part, posted for 2012. The T&G generated for $42 million of that revenue total.
Fitchburg attorney James Galliher, who represents the independent carriers, reportedly told Judge Frison this Monday that the "creative accounting" used by the Times to determine the sale price could cause the T&G to be "basically worthless." He also reportedly called the Globe a "distressed property" that is being sold well below its real value.
Saturated with toxic chemicals
Judge Frison’s temporary injunction, which stopped the sale of the T&G and Globe to Henry, was followed, yesterday, by a Boston Business Journal article, Boston Globe's site contamination hampers development options.
The contamination, according to the BBJ article, was first documented 17 years ago by Green Environmental. “A spokesman for the DEP,” the article states, “confirmed that some or all of the contaminants outlined in the Green Environmental report stem from spillage and leakage of diesel fuel stored and distributed from tanks on the Globe’s property.”
The Globe property has been valued “between $29 million and $71 million,” the BBJ article reports, citing confidential financial documents prepared by New York investment bank Evercore Partners plus interviews with local real estate sources. “The Evercore report noted that the higher end of those appraisals was based on an ‘in-use’ valuation, meaning the Globe’s headquarters would continue to operate as a printing and newspaper distribution facility under a new owner.”
However, the BBJ article cites “sources familiar with this summer’s bidding for New England Media Group. “Every proposal,” those sources reportedly say, “included plans to sell the Globe’s 670,000-square-foot headquarters and move its operations to a smaller space.”
Henry was not available for comment, according to the BBJ article, and both the Globe and Times declined to comment.
Wait ‘til next year?
The latest batch of bad news for the Times and Henry may be the straw that breaks the proverbial camel’s back on their famous deal.
Adding to the challenges facing their pact, is the state of New England Media Group’s finances. The primary properties of the Group are: the T&G; Telegram.com; the Globe; BostonGlobe.com, Boston.com; GlobeDirect, the Globe’s direct-mail marketing company; and a 49-percent interest in Metro Boston.
As BBJ reported in August, in an article titled John Henry’s shrinking Globe, the Group’s total revenue “is expected to fall to $363.8 million next year, off 18 percent from the $440.6 million booked in 2009. Despite around $35 million in cost cuts teed up through 2014, the company has forecasted nearly $20 million in net operating losses over the next two fiscal years.
When the Times and Henry announced their deal in August, they expected it “to close in 30 to 60 days.” Now, though, Judge Frison’s independent-carriers ruling coupled with the toxic mess on Morrissey Boulevard, the closing may - as Red Sox fans declared for 86 seasons – have to wait ‘til next year.
Steven Jones-D'Agostino is chief pilot of Best Rate of Climb: Marketing, Public Relations, Social Media and Radio Production. He also produces and hosts The Business Beat on 90.5 WICN, Jazz Plus for New England. Follow him on Twitter @SteveRDAgostino.
Related Slideshow: Ten Greatest Days in New England Sports History
February 1, 2004
Patriots 2004 Super Bowl
In 2004, the Patriots captured their third Super Bowl in four years. The win put New England in the group of the small number of dynasty teams in the NFL, joining the Packers, Steelers and 49ers.
Super Bowl XXXVIII finished with the Patriots holding on to a 32-29 win over the Carolina Panthers.
The game was also famous for the infamous wardrobe malfunction involving Janet Jackson and Justin Timberlake.
December 21, 2010
Longest Winning Streak
The UConn women broke UCLA men's streak of the most consecutive wins in a season.
They dominated their sport like no other and on December 21, 2010, UConn's 93-62 win over Florida State put UConn women in the #1 position.
Later, Sports Illustrated named UConn women as the #3 greatest dynasty in sports in the decade behind only the Lakers and Patriots.
June 12, 1984
Celtics v. Lakers
The 1980's were the glory days of the NBA and the Boston Celtics and the Los Angeles Lakers were the two teams that elevated the play and excitement of the era.
Larry Bird and Magic Johnson were the superstars and were the feature players. Their rivalry started in the NCAA finals when Magic dazzled and Bird fizzled.
On June 12, 1984, the Celtics won game seven, 111-102 with Cedric Maxwell leading the Celts in scoring with 24 points and a team leading 8 assists. Bird was MVP of the series.
October 27, 2004
Curse of the Bambino
In 2004, after the dramatic historic come from behind win against the Yankees, the Red Sox went on to the World Series and swept the Cardinals 4-0, to win the first title since 1918.
The World Series win broke the proverbial "Curse of the Bambino" which had been in place since the Red Sox sold Babe Ruth to the Yankees.
November 23, 1984
BC v. Miami
There could not have been a more unlikely superstar and there could not have been a bigger stage to pull off the most dramatic win when BC beat the defending National Champions. Quarterback Doug Flutie put on the best show - maybe ever -- in college football.
Flutie threw for 474 yards and 4 touchdowns and the last TD was to Gerard Phelan on the final play - maybe the most exciting play ever in sports.
Final score: BC 47, University of Miami 45.
October 13, 2013
Patriots Beat New Orleans on Last Second TD; Red Sox Comeback from 5 Runs Down v. Tigers
New England sports fans enjoyed the most improbable double header comeback wins.
First, the Patriots upset the undefeated New Orleans Saints with a 70 yard last minute drive that saw the Patriots score with just 5 seconds to steal a 30-27 win. The Saints had numerous opportunities to put the game away.
Then, the Boston Red Sox in Game Two of the ALCS at home rallied from a 5 run deficit in the 6th inning and came back on a David Ortiz grand slam to tie and a 9th inning hit to win. The Red Sox had lost Game One of the series 1-0 and were on the verge in Game Two of losing any chance of winning the series.
May 10, 1970
Bruins Beat Blues 4-3 in OT to Win Stanley Cup
The Boston Bruins took New England by storm behind the play of Phil Esposito and Bobby Orr.
In the final game and the score tied 3-3, Orr scored the winning and iconic goal to launch the Bruins into the hearts of New Englanders and to create one of sports most memorable photos.
April 28, 1966
Celtics Win 8th Straight, Red's Last Game, Russell First African American Head Coach
The win by the Boston Celtics over the Los Angeles Lakers in 1966 was a triple header for sports.
First, the 1966 Championship was the 8th straight and set a record never to be matched.
Second, it was the last game that Red Auerbach would ever coach.
Third, as Red stepped down, the enigmatic Bill Russell was named player coach - he was the first African American pro coach of the modern sports era. (Brown alum, Fritz Pollard coached pro football).
February 3, 2002
Patriots Upset Rams to Win 1st Super Bowl
The New England Patriots were 14 point underdogs to the Rams and this was expected to be one of the biggest blowouts in Super Bowl history.
Instead, the Patriots played physical defense and although outgained 427-267 in yards, went on to best the Rams.
The Patriots won on a last second field goal to win their 1st Super Bowl by a score of 20-17.
October 20, 2004
Red Sox Come Back from Down 0-3, to Beat Yankees in ACLS
The Red Sox were looking at another sad loss to the New York Yankees three games to zero and down to 3-4 in the ninth inning and down to their last three outs. The Sox scratched a run off a stolen base by Dave Roberts and a clutch hit by Bill Mueller to tie the game 4-4 and send it into extra innings.
In the 12th inning, the Red Sox scored two runs off a walk off homer by David Ortiz.
The Red Sox went on to make history winning three more games.
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