The clock is ticking on the Boston Globe’s future. After the last several days of closed-door negotiations and union disagreements, there does not appear to much consensus on what the main unions for the Globe will do. The same is true for the New York Times, which continues a free-fall of its own.
The Globe lost around $50 million a year ago, and was on pace to lose roughly $85 million this year. But with circulation and advertising in a downward spiral (The Globe’s average weekday circulation, for example, fell 14 percent to 302,638 for the six months to March 31 from a year earlier, according to the Audit Bureau of Circulations), as more and more people cut costs and get their news and information from other sources – the unions should consider the $20 million to be a gift.
The truth is really stacked in favor of the Globe being shut-down.
For starters, the New York Times cannot find potential buyers (apparently local Massachusetts politicians have struck out as well) because no one sees value in the Globe. Even local patriots to the area (pun intended to the Kraft family) ran away after reviewing the balance sheets.
Another possibility, consolidating newsrooms and resources to help streamline the operations of both the New York Times and the Globe, has been rejected by Times management.
This means the options are few. Either, find some ways to cut costs now and keep the paper on life-support for another year, or shut it down now and stop the bleeding.
Of course, the obvious pinch for the NY Times is that if the unions stand firm and refuse to find $20 million and they do not shut down the Globe, they will look weak to investors. And if they do shut down the Globe? They are admitting a $1.1 billion purchase (The Globe’s sale price a few years ago) of the historic Boston rag was a colossal bust.
At the end of the day, the worst possible outcome for the Globe and the NY Times is if the Boston unions pull their heads together and find the $20 million in cost savings. It does not take a rocket scientists to realize that if you lose $50 million and then lost $65 million (instead of $85 million), you are still… losing money at an unsustainable rate. The question the Times has to ask itself is, regardless of what the Boston unions do – why are they doing this to themselves?