REPORT: Telegram Could Sell for $3 Million, 97% Loss in Value

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Monday, October 07, 2013

GoLocalWorcester Business Team

A report in Boston Business Journal outlines that Worcester's only daily newspaper's fate is in question after its sale as part of the Boston Globe deal to Red Sox majority owner John Henry.

The Telegram's new owner may absorb the paper into the Globe, could sell it, and could simply close it.

The value of the Telegram is limited. "People familiar with the T&G’s operations say it remains modestly profitable and could command a market value in the $3 million-to-$10 million range if Henry were to sell. Much of that potential value would depend on how well the T&G could affordably build out an administrative and technology infrastructure now that those operations are largely housed at the Globe’s headquarters on Morrissey Boulevard in Dorchester, sources say," writes the Boston Business Journal. Amazingly, the Telegram and the real estate were purchased in 1999 for just over $300 million (the newspaper for $295 million and the Telegram and Gazette building for $13 million).

In recent years, the Telegram has been devastated by staff cuts, shrinking circulation and loss of advertising revenue -- especially in the past five years. According to an article by GoLocal's Pulitzer Prize-winning investigative editor at-large, Dean Starkman, newspapers like the Providence Journal and the Worcester Telegram have cut beyond the bone, "This is beyond fat, and well into bone. Really, we may already be getting past the point of no return."

New numbers from the financial documents circulated by the New York Times Company's investment bank during the sale of the Telegram reported that weekday circulation for the Telegram has fallen from 80,400 to just 57,231 from 2008 to 2012. The Telegram's circulation now just reaches a small fraction in print of Central Massachusetts's population of more than 1 million.

 

New York Times Company is selling the Telegram at a massive loss

Sale of the Worcester Telegram

The sale of the New England Media Group by the New York Times Company announced in August raises more uncertainty for the Telegram.

The Newspaper Guild has received a letter from the outgoing owners of New England Media Group verifying that as a condition of the sale, all contracts at New England Media newspapers will be assumed by the new owner, John Henry. "We’ve told them we’re looking forward to meeting with the leadership team Mr. Henry will be assembling to run the Worcester Telegram and Gazette, but no date has been set," John Hill President of the Newspaper Guild wrote on the union's blog on September 11, 2013.

The purchase by Henry was announced the first week of August and the deal was to have closed within 6 weeks.

 

More than 350 layoffs over the past two decades

Staffing Cuts

Between 2008 and 2012, the Telegram cut more than 50% of its staff. As GoLocalWorcester reported in April of 2012, the Telegram was closing its printing facility and laying off nearly 70 employees. In total, more than 200 Telegram employees have been cut in the past four years. Today, the Telegram has fewer than 200 employees. In 1991, the paper employed more than 550, according to a story in one of the national wire services.

Even after the announcement of the sale of the Telegram and Globe by the New York Times, more cuts were announced in early September. According to Hill, "A representative from New England News Media Group notified the Guild Tuesday that they have laid off two full-time employees in the library and one part-time copy editor in the sports department at the Worcester Telegram and Gazette. The affected employees will receive severance in accordance with our existing the contract. The T&G also laid off 11 employees in advertising, who are not covered by our contract."

Telegram.com charges nearly $200 per year for Web access

Paywall Strategy and Worcester Connect

The Telegram's metered paywall limits accessibility to the newspaper's website. According the Telegram's website, the cost for a digital subscription is $15.95 per month, adding up to $191.40 per year. The Telegram's paywall is similar to the BostonGlobe.com model, but recently a number of newspapers ranging from the Dallas Morning News and San Francisco Chronicle have dropped their pay walls in an effort to stem the loss of pageviews, lost advertising revenue and decreased engagement. “Listening to our subscribers is vital to the success of our daily newspaper and was a major factor when deciding to launch our new premium experience,” said Jason Dyer, chief marketing officer for The Dallas Morning News. “We are dedicated to continually updating and adjusting our digital strategies to give our subscribers what they want.”

The newest Telegram initiative is Worcester Connect - a digital meeting place that was shopped to more than 25 local advertisers at a sponsorship cost of $25,000. Only one sponsor signed up - Harvard Pilgrim, headquartered in Wellesley, MA.

Worcester Connect is a no-charge area of content within the Telegram site. According to one financial service advertiser who was approached to pay $25,000 to sponsor the new web initiative in Worcester, "We just don't see the value in Worcester Connect and we worry about the paper's longevity."

Related Articles

• NEW: Worcester Telegram, Boston Globe Facing Layoffs
• T&G Building Contamination Has Unions Concerned
• NEW: Worcester Telegram, Boston Globe Up For Sale
• T&G Massive Layoff: A Harsh Reality For Ex-Employees
• Telegram For Sale
• Taxpayers Demand Accountability for T&G Cleanup
• What the Experts Say About the Boston Globe and Telegram Sale
• Who should pay for the T&G contamination clean up cost?
• Who Will Buy The Worcester Telegram?
• Council Approves City’s $2.5M Loan for Former T&G Building
• Boston Globe and Telegram Sold - Lose 94% of Value
• Murray Says T&G May Have to Pay Up for Building Contamination
• NEW: Carpenter Union Protests Outside New Telegram Building
• Officials Call for NY Times to Clean Up T&G Contamination

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