Worcester Telegram’s Sole Local Bidder Walks - Future in Question
Sunday, March 09, 2014
“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.
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.
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).
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:
April 6, 2012
June 22, 2012
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.”
June 27, 2012
July 11, 2013
July 13, 2012
July 24, 2012
February 7, 2013
February 20, 2013
August 3, 2013
August 5, 2013
August 18, 2013
October 23, 2013
October 24, 2013
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- NEW: Worcester Telegram, Boston Globe Facing Layoffs
- Boston Globe and Telegram Sold - Lose 94% of Value
- NEW: Worcester Telegram, Boston Globe Up For Sale
- Dean Starkman: Telegram & Gazette Becomes a Thanksgiving Leftover
- REPORT: Telegram Could Sell for $3 Million, 97% Loss in Value
- For the Telegram & Gazette, a Moment of Opportunity
- Telegram For Sale
- John Henry Goes Silent on the Future of the Worcester Telegram
- The Living History of the Telegram
- NEW: Carpenter Union Protests Outside New Telegram Building
- What the Experts Say About the Boston Globe and Telegram Sale