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Worcester Telegram’s Sole Local Bidder Walks - Future in Question

Sunday, March 09, 2014

 

The Worcester Telegram will not have local ownership. The one group of local bidders has withdrawn.

“It's a paper with a shakier foundation than they had in the past. Anyone who buys it will have the same problems (John) Henry's tying to offload,” said Professor of Mass Communication John Carroll at Boston University.

The Telegram sold in the early 1990s for more than $300 million with real estate to the New York Times Company. Then 20 years later, The New York Times sold the Telegram, the Boston Globe, half interest in The Metro, printing presses and other assets for just $70 million to Boston Red Sox owner John Henry .

Henry announced that he was selling both the Telegram in November and the Boston Globe Headquarters in January. The sale of the Globe HQ may generate as much as $50 million.

“The conditions on the ground make it different.  It looks like [the Telegram] would go at bargain basement prices...the estimates of $7 million are high.  There's no headquarters as they rent. Henry's not selling the printing plant, he needs it,” said Professor Carroll.

No Local Bidders

The one group of local bidders was comprised of Polar Spring's Ralph Crowley and former Telegram editor Harry Whitin.

"It was always local families selling to a national group -- you never saw papers going the other way.  Now we're starting to see it.  Sometimes it has a happy outcome -- take Henry with the Globe,” said Dan Kennedy, Professor at Northeast and national media expert. “Brian Tierney with The Philadelphia Inquirer and Philadelphia Daily News.  He was the first person to step up and buy papers from Knight Ridder, and Tierney turned out not to have enough to money to do it, it was an ugly mess,” said Kennedy.

Who is Left as Potential Buyers

The two remaining groups are Gatehouse Media – the Perinton, New York, newspaper group that publishes 97 dailies in 20 states and 198 paid weeklies, in addition to free papers. Gatehouse declared bankruptcy in fall of 2013 and restructured and emerged from bankruptcy in November of last year.

John Henry, owner of the Globe

“I don't have the numbers -- when Gatehouse did the deal (bankruptcy), it was a very complicated transaction.  They had a sister investment firm buy them -- and then the management was turned over.  The first thing they did was cut jobs and lots of people were out the door,” said Kennedy.

The other potential media group is Digital First Media – it owns hundreds of media properties across the country and a number of newspapers in Connecticut and Massachusetts.

“Digital First seems to be one that's intriguing to some people. They own the Denver Post, New Haven Register (and the Fitchburg Sentinel and Enterprise), -- they're doing interesting things in terms of what they're investing in.  They seem to be intriguing on that level,” said Professor Carroll.

Value of the Telegram

As Boston University Carroll outlined a price of $7 million may be on the high side, the price may be in the $2 million to $3 million range. GoLocalWorcester reported in October:

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).

Doesn't fit the Globe's future

Next Steps

With John Henry working to divest both the real estate and the Telegram, it is likely that Telegram may be sold for 1% to 3% of its original sale price of 1999 – in 1999 dollars it may mean the Telegram could sell to Gatehouse of Digital First for approximately 1% of that sale price. The Globe is looking to make a deal before June of this year.

 

 

 

 


 

 

Related Slideshow: The Living History of the Telegram and Gazette

From contamination to a sale, and injunction to layoffs, the Worcester Telegram & Gazette has been through quite an interesting run in a very short time. Since 2012, GoLocal has been chronicling the goings on of Worcester's only daily printed newspaper. Take a look at our coverage:

Prev Next

April 6, 2012

T&G Massive Layoff: A Harsh Reality For Ex-Employees

If the Worcester Telegram & Gazette was offering alternatives for the 64 employees it is laying off, Luis Lopez didn’t get the memo.
 
“I knew it was coming, but it’s hard,” the 37-year-old father of two girls said of being laid off Monday from the job he held for six years at the T&G’s Millbury printing plant. “When I came here, they promised me they would not lay me off. Now look at me.”
Prev Next

June 22, 2012

NY Times Corp Leaves Taxpayer on the Hook for Contamination in Worcester

The New York Times Company has sold a contaminated Worcester Telegram and Gazette building to a local development agency, leaving taxpayers on the hook for potentially up to $1.1 million in cleanup costs.

Before the sale, Telegram and Gazette publisher Bruce Gaultney publicly promised that the building was “not a brownfield.”

Prev Next

June 27, 2012

NY Times Company Agrees to Pay for Cleanup

The New York Times Company announced that they have agreed to pay for cleanup costs associated with contamination left at the former location of the Worcester Telegram & Gazette at 18-20 Franklin Street.
 
The announcement comes just days after a GoLocalWorcester investigative report that unveiled that the property was a brownsfield site, despite claims by the publisher that it was not.  The non-profit Worcester Business Development Corporation, which bought the property, is receiving government funds to pay for the cleanup of the former newspaper headquarters.
Prev Next

July 2, 2012

T&G Building Contamination Has Unions Concerned

Two local unions are concerned about the health hazards at the former Telegram & Gazette building, after the NY Times Company sold the property to a local nonprofit and the building was declared a brownfield site.
Prev Next

July 10, 2012

NY Times Co Only Commits to 10% of Cleanup Cost

The NY Times Company is only committed to paying 10% of costs to cleanup the hazardous materials at the T&G building, leaving taxpayers footing most of the $1.1 million bill to clean up asbestos, lead, and other contaminants.
Prev Next

July 11, 2013

Taxpayers Demand Accountability for T&G Cleanup

Local taxpayers are demanding that the NY Times Company takes responsibility and pays for the T&G cleanup.
 
Thus far, the corporation has only offered to pay for 10% of the estimated $1.1 million cleanup costs to rid the building of asbestos, lead, and other hazardous contaminants.
Prev Next

July 13, 2012

Officials Call for NY Times to Clean Up T&G Contamination

Massachusetts legislators, candidates, and councilors are calling for the NY Times to contribute more money for the cleanup of the T&G building contamination. Across the board and across the aisle, they say there’s a need for more corporate responsibility and taxpayers should not be stuck with the bill when a large company is involved.
Prev Next

July 24, 2012

Worcester Telegram, Boston Globe Facing Layoffs

The Boston Globe and Worcester T&G are facing layoffs and buyouts, affecting a total of about fifty employees between the two markets. Both newspapers are owned by the same media group which is a subsidiary of the New York Times Company.
Prev Next

February 7, 2013

Murray Says T&G May Have to Pay Up for Building Contamination

Lieutenant Governor Tim Murray said that the brownfield site cleanup at the former home of the Worcester Telegram may still take some funding from the former owner, the NY Times Co. The building was sold by the news company after an estimated $1.1 million in cleanup costs to remove asbestos, lead, and other contaminants.
Prev Next

February 20, 2013

Worcester Telegram, Boston Globe Up For Sale

The New York Times Company announced on Wednesday that the Worcester Telegram & Gazette, Boston Globe and their related websites are up for sale.
The company has retained Evercore Partners to advise and manage the sales process of the two newspapers, along with the other related properties contained within the New York Times Co.'s New England Media Group.
Prev Next

August 3, 2013

Boston Globe and Telegram Sold - Lose 94% of Value

 
The New York Times Company has dumped the Boston Globe, Worcester Telegram and some other holdings for less than 6% of what they had paid for the combined assets over the past three decades. John Henry's sports and media group will pay approximately $70 million.
Prev Next

August 5, 2013

http://www.golocalprov.com/business/29273/">What the Experts Say About the Boston Globe and Telegram Sale
 
On Saturday morning, August 3, at 3 A.M., the New York Times Company confirmed the sale of the Boston Globe, Worcester Telegram, and other New England assets to John Henry in an all-cash, $70 million deal.
 
Go Local reached out to top experts on media to get their perspective on the transaction, and insights as to what this means for the future of the paper, as well as industry as a whole. The Boston Globe, once the biggest force in media, has been in decline over the past decade, and now faces an uncertain future.
Prev Next

August 18, 2013

Starkman: For the Telegram & Gazette, a Moment of Opportunity

The tectonic shifts changing the global media landscape are rolling through Southeastern New England, right on schedule.
 
The media empire of the Providence Journal’s parent company, Dallas-based A.H. Belo, has been coming apart for years, and now, with the sale last week of its Riverside, California, operation, the Press-Enterprise, down to just two main properties. The hope here is that the Projo will, too, be sold before long and end the chronic and debilitating cycle of downsizing for the newsroom and bonuses for the executive suite that has marked the Belo regime.
Prev Next

October 23, 2013

John Henry Faces T&G Labor Dispute And Globe Toxic Waste

For John Henry, the St. Louis Cardinals may pale in comparison to the challenges he faces with the Telegram & Gazette and the Boston Globe. In Worcester, he’s now dealing with a temporary restraining order that blocks his purchase of the two papers. In Boston, the Globe’s headquarters sit on land that is highly contaminated.
Prev Next

October 24, 2013

Injunction Blocking Globe Sale Lifted

Judge Shannon Frison of Worcester Superior Court has lifted an injunction blocking the sale of the Boston Globe, and affiliated Worcester Times & Gazette, to Red Sox owner John Henry. On Thursday afternoon, the judge ruled removed the order which was requested as part of a lawsuit filed by former Telegram & Gazette adult carriers.
 
 

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