The first question one of my editors asked me on Friday night when hearing that The New York Times Co threatened to shut down The Boston Globe was whether it was a negotiating tactic. That's an easy one, for sure. Unions causing you problems at your business? Need to cut costs? Threaten to kill the whole business. It helps your adversaries reorganize their priorities right quick (Though sometimes they really mean it. Look at Hearst in Seattle).
Here's a hypothetical recipe for how you could do it if you were running The New York Times:
You spent $1.1 billion on a paper that, thanks to the sunset on the newspaper business, is worth far less now. In fact, it's dragging down the whole company, and you would rather let it rot than eat away at the fortunes of your flagship paper. The last time someone hinted that they would be willing to pay -- about half of what you did -- you said "no."
Oops. Now no one will buy it, even though you're also selling free tickets to see the Red Sox in the form of your stake in the company that owns the team.
Tell the union reps that you need $20 million in cost cuts, that your loss on the paper will be $85 million this year and that you need it done pronto. If not, no more paper. To make it really crazy, do this on a day when the paper's editor is across the country in Oregon, delivering a lecture to journalism students that deals with the sorry state of affairs that the journalism world is in.
Wait for someone in the union to leak the threat to the nearby alternative paper that follows the Globe's goings-on like white on rice (The Boston Phoenix in this case), then let the Globe's editors run their own story. (PS: I won't link to the Phoenix because it's throwing a pop-up ad at me whenever I visit the page that invites me to download anti-virus software. I won't inflict that pain on readers.)
When other reporters call, decline comment.
Watch the story go around the world. Watch a buyer emerge, someone who fulminates long and hard about civic responsibility and not letting a hallowed journalistic institution go to ground. Sell it to that buyer at a massive loss, which one of the in-house tax geniuses can find a way to write off in a way that's advantageous to the company.
I'm not saying that the Times wouldn't let the Globe die or that it wouldn't be a big loss to Boston. Still, The New York Times Co wants to protect one thing: The New York Times. That's what the Ochs-Sulzberger family's trust is all about. The shares in that family's trust control the company but it's really about the paper, and it's not certain that a huge offer to buy the company out could persuade the family to get rid of it (despite prior evidence). Heck, the Times even lists the trust as one of its risk factors in its securities filings.
As for the Globe? It really is a steal now.
Keep an eye on:
Variety's longtime editor Peter Bart will no longer oversee day-to-day activities for the Hollywood trade paper (LA Times)
Pixar Animation's "Up" is drawing scrutiny from both Wall Street and toy retailers (NY Times)
Glam Media has raised $10 million in a fifth round of financing (paidContent)