The New York Times Co has agreed to sell The Boston Globe to the principal owner of the Boston Red Sox baseball team for $70 million in cash, a small fraction of what the Times paid for the newspaper 20 years ago.
Under the transaction announced Saturday, Red Sox owner John W. Henry got the Boston Globe for less than a tenth of what the New York Times paid when it bought the newspaper for $1.1 billion in 1993.
Continue Reading Below
The sale also includes the Worcester Telegram & Gazette, which the New York times bought for about $300 million in 2000, as well as related digital properties of both papers, and a direct mail marketing company.
The sale caps years of uncertainty for the Globe, which was put on the auction block twice as newspapers across the country have been hit by plunging advertising revenues and readers who increasingly prefer to get their news on smart phones and tablets.
The New England 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.
"We are very proud of the association we have had with the Boston Globe and the Worcester Telegram & Gazette and we're delighted to have found a buyer in John Henry, who has strong local roots and a deep appreciation of the importance of these publications to the Greater Boston community," Mark Thompson, chief executive of The New York Times Co, said in a statement.
"As a result of this agreement, we will be able to sharpen our company focus on and investments in The New York Times brand and its journalism."
The media-shy Henry, who was born in Quincy, Illinois, and built his fortune as a futures trader, declined to outline his plans for the New England media group until the deal closes.
But in a statement he said he wanted to make it clear "how strongly" he felt about the important role of the enterprises in New England, and especially the Boston Globe's "award-winning journalism as well as its rich history and tradition of excellence."
Total revenue for the New England papers fell 7.4 percent in the second quarter to $94.4 million on declines in advertising and circulation revenue.
Compounding the problems for the papers that likely weighed down the price were significant pension obligations and difficulty of negotiating changes with more than a dozen labor unions that represent about three-quarters of employees.
The New York Times said on Thursday that it would maintain the pensions for the papers.
The New York Times first put the Globe up for sale in 2009 as it struggled with losses. But it halted the sale process and decided to hang onto the paper after winning concessions from unions and implementing cost cuts.
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.
(Reporting by Jennifer Saba; Editing by Vicki Allen)