The saga between the Boston Globe and The New York Times Co. (NYSE:NYT) seems ready to continue on to another round. The New York Times Co., which owns the Boston Globe, has been trying to trim $20 million dollars in cost reductions in order to minimize their losses. It has been reported that last year the Globe lost $50 million dollars and that this year they are expected to lose about $80 million dollars. With the Globe expected to lose money, it should not come as a surprise that severe cuts might have to take place in order to save the Globe. The labor unions aren’t making this simple though.
In order to achieve their goal, The New York Times recently proposed a package of benefit and wage cuts. The unions responded with a flat out rejection and The New York Times now finds itself implementing a 23% salary cut for all employees across the board.
The unions really should have accepted the package.
It’s understandable that the unions opposed any sort of cuts. Who likes to have their salary reduced? No one. But surely, the package they were offered must have been better than the 23% salary cut they’re now facing.
The New York Times is now quietly looking for buyers and is ready to sell the Globe because honestly, there is only so much you can do for a company that is no longer making you money nor willing to compromise and meet you half way. Goldman Sachs (NYSE:GS) is soliciting interest in a potential sale and is said to have a couple of parties who are interested. The unions may now have to deal with a new owner who is more than willing to start dismissing people or if no one buys the Globe, then The New York Times won’t have any other choice but to close it.
However, the real question is: “Who wants to buy a newspaper?”
Newspapers are no longer profitable and many have already thrown in the towel. The internet is largely to blame because information is now so readily available with a simple click of the mouse.
Take this article for example. You didn’t pay to read it and you did it within the comfort of your own home or office without ever taking a step out. Newspaper advertisements have declined drastically and profits are no longer what they once were. Any company that decides to buy the Globe would be committing financial suicide because the Globe really is nothing more than a financial burden. Online media is now the king of information and newspapers can do nothing about it.
So please, if you’re thinking about buying the Globe, stop and think about it because it just doesn’t make sense.