It will go down as a great journalistic and capitalistic miscalculation: In 1993, The New York times paid $1.1 billion to buy The Boston Globe from from the descendants of Charles H. Taylor. On April 3, 2009, The Times confessed that its most expensive acquisition is a liability, not an asset, by threatening to close the paper down if, within one month, its employees would not agree to concessions allowing The Globe to stop a reported bleeding of more than a million dollars a month.
General Motors arguably made bigger, more foreseeable miscalculations, and for longer. Otherwise, the failure of the Times’ Globe acquisition must go down with the 1968 merger of the Pennsylvania and New York Central Railroads, and with the final failure of Eastern (1991) Pan American (1991 and Trans World (2001) Airlines, as case studies in American capitalism’s cruel genius of affixing moral hazard to blunderers.
The first thing to note is that The Times has no intention of folding The Globe. Saying so is one of three lies currently in circulation that better journalism would have identified as stunts. (The others: The MBTA’s saying it is about to shut down all off-peak and weekend service; and Tom Menino’s letting people guess he may not run for a fourth full term as mayor of Boston.)
The Times won’t shut down The Globe because if it did it would be left with a couple of buildings and some printing presses, and — the central point — someone else would quickly step in, snap up the cream of The Globe’s intellectual capital, and fill the journalistic void using other buildings and other presses.
What The Times wants to do is to get The Globe’s costs and unfunded liabilities down to the point of finding a willing buyer, sane or otherwise, at two cents on the 1993 dollar, or $40 million.
The Times itself set The Globe’s decline in motion: In the mid-1990′s, when times were flush, the paper was stripped of its pretensions of being a great national newspaper. The Times wanted The Globe to be dominant in its regional market, but not so good that it would compete with the New England edition of The New York Times. This was a tactical business decision that proved to be strategically catastrophic.
Moves such as as cutting back The Globe’s direct national and international coverage, replacing compelling writers and columnists with pedestrian ones, and disregarding the quality and vitality of the editorial pages were bad for the morale of the institution, including its readers. The paper was thus weakened before it faced a recession and concomitant epochal collapse in newspaper advertising. Now the plan is to double the newsstand price for a product every intelligent reader knows is worth less than it used to be.
Of any business it may be said it that it is at once unique, and just a business like any other, subject to its changing markets. It seems to me a metropolitan daily newspaper’s unique marketable value is its good will. Absent owners may, as a business matter, get away with reducing the breadth, though not the quality, of content. But when ownership makes it obvious that the newspaper no longer has any stake in the city or state it serves, the good will that sustains its business may be lost forever.
One mistake newspapers have made is to believe their own bad press. Much is made of the generation that gets its news on line. Too little is made of the fact when it comes to history, or to difficult political issues slogans can’t explain, this generation is very poorly informed. Yet much of the generation that gets its news in on-line snippets is, if anything, more conscientious about the future of the country than its overly acquisitive immediately preceding cohort. If daily newspapers didn’t exist to serve this generation as it buys homes and makes babies, they would have to be invented. As it is they have to adjust.
When I worked in the weekly newspaper business in the 1980′s, the publisher’s first meeting of the week was with the ad-reps. Then, he would tell the editorial people, to their annoyance, how many pages they would have, based on the number of ads. Daily newspapers must operate that way, and if ad lines have dropped 50%, so has their value — and therefore so must their price. Newspapers must belatedly adapt to the challenge of the chaotic, democratic world of the Web, just as radio adapted to the challenge of television.
The depleted Boston Globe retains a lot of talent — talent that will be better off when it is free of the yoke of a New York Times now entirely concerned only with its own survival. New management must then become obsessed with the quality of content. It would also do well to follow the practice of the Globe’s late editor, Tom Winship. In the early 1970′s, he shook up his hierarchy by advancing talented writers in their 20′s, to the enormous long-term good of the paper.
