BOSTON – A Massachusetts judge has temporarily blocked the sale of The Boston Globe and Telegram & Gazette to Boston Red Sox owner John Henry because it could complicate a pending class action lawsuit, according to court documents.
The New York Times Co had been due to seal the reported $70 million deal for the papers and related businesses with Henry on Friday, nearly three months after it was first announced.
Judge Shannon Frison of Worcester Superior Court issued the order on Friday after lawyers said the sale could interfere with a lawsuit against the Telegram & Gazette filed by the newspaper's carriers, in which they are seeking status as employees instead of contractors.
"The defendant ... is hereby enjoined and restrained from transferring ownership or interest in any of its assets ... until further order of this court," according to Judge Frison's order, obtained by Reuters.
The order said the sale would be blocked "unless the parent company, New York Times Company" agrees to become a defendant in the class action suit against the Telegram & Gazette and sets aside at least $60 million to cover potential liability.
A lawyer for the New York Times told the court that the company was unwilling to assume liability for the lawsuit, according to a report in the Telegram & Gazette on Tuesday. A New York Times Co official was unavailable to comment.
The $70 million price tag is a small fraction of the $1.1 billion the Times paid for the Globe newspaper 20 years ago - reflecting plunging advertising revenues and a shift in readership from print to the Internet.
The sale would also cap years of uncertainty for the Globe, which was put on the auction block twice since 2009.
The properties were the last pieces of a once much bigger New York Times Co empire. The company has sold off everything - TV and radio assets, dozens of U.S. regional papers, digital companies, and its stakes in sports ventures - to focus solely on its flagship and international edition.
The media-shy Henry, who was born in Quincy, Illinois, and built his fortune as a futures trader, has declined to outline his plans for the New England media group until the deal closes.
The New York Times Co used to own a stake in Henry's Fenway Sports Group, which includes the Red Sox, the Liverpool Football Club, and stakes in New England Sports Network cable TV channel.
(Writing by Richard Valdmanis; Editing by Phil Berlowitz)