When will the Boston Globe close?

By Felix Salmon
May 8, 2009

Robert Gavin of the Boston Globe interviews his own publisher today, and for all the pro-forma statements that the Globe isn’t going anywhere (“the Globe will still be publishing a year from now – and beyond”), the matter is explicitly and entirely out of his control:

The paper had just completed the reduction of 50 jobs in the newsroom when the Times Co. called union leaders together and threatened to shutter the Globe unless they agreed to major concessions. Ainsley said that decision was made by top executives in New York and that the Globe’s losses, coming on top of the dismal first quarter for the Times Co., likely forced their hands. He described it as the likely cause, because he said he doesn’t know exactly what the reasoning was.

“That wasn’t my call, that wasn’t my decision. That was made at the upper reaches of the company so you’d really have to ask them,” he said.

If you read the whole article, it’s pretty clear that the Globe is losing an enormous amount of money right now; that it has essentially zero chance of being profitable at any point in the foreseeable future; and that the chances of anybody wanting to pay good money for it have gone from Jack Welch to zero.

Given all that, it seems to me that the Globe is surviving mainly on an unsustainable mix of nostalgia, pity, and desperate hope, mixed with a certain quantity of noblesse oblige on the part of the Sulzbergers. I put the over at 14 months, and the under at nine.

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Comments
3 comments so far

I’ve been paying close attention to this, b/c I still pickup a copy of the WSJ on my doorstep, and the NYT at lunch.

But what are the actual costs of physically printing the paper? If you take the numbers for the NYT — just the “raw cost” — from TBI (http://www.businessinsider.com/2009/1/p rinting-the-nyt-costs-twice-as-much-as-s ending-every-subscriber-a-free-kindle) you get: 63MM*4=252MM/830,000=303.61 or given 365 issues, .83 an issue. Current home delivery of the paper 7 days a week amounts to .76/issue (http://homedelivery.nytimes.com/, 10003 zip). So, ignoring revenue streams from advertising/newsstand purchasers, along w/ the costs of maintaining reporters/staff, you’re already at a lost, for one of the top 5 newspapers in the world.

(With all caveats that this is overly simplistic analysis.)

Any good paper’s core competency is its staff. Kill the paper making. Keep the Globe.

@quantacide: For paid print publications, the subscription/newsstand price typically brings in about 20-25% of revenue. The rest is advertising. Advertising has been in decline for perhaps a decade, in large part because it is expensive and untargeted. It’s less expensive on the Web, and can be highly targeted.

In particular, newspapers have been highly dependent upon auto and home goods advertising, and because purchasing of these discretionary items has declined significantly, so has their advertising.

Few if any have been able to make a paid subscription model work on the Web. And advertising revenues for the Web are a fraction of those for print, even with its more targeted reach.

Anyone could have seen this day coming, but rather than experimenting with new business models, print publishers chose to milk their cash flow.

Posted by Curmudgeon | Report as abusive

Advertising revenue has declined because readership has declined and it is simply more effective to advertise where the readers are.

Readership has declined because people do not trust what the papers are printing.

Until the papers rediscover journalism, opposed to activism, readers and revenues will not return.

Posted by John M. | Report as abusive
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