Supposed Buyer for NYT’s Boston Red Sox Stake Says He’s Not Interested
by Peter Kafka
Posted on December 29, 2008 at 6:04 PM PT
One of the supposed buyers for the New York Times’s (NYT) stake in the Boston Red Sox–one of the few assets the paper can unload as it tries to bail itself out of a cash crunch and looming debt problem–says he’s not buying. Here’s the report from the Boston Globe (which the Times owns):
Both Boston Herald publisher Patrick Purcell and former Boston advertising executive Jack Connors separately flatly ruled out being involved in deals to buy the Boston Globe, which is owned by the New York Times Co. Connors further said he had no interest in buying the Times Co.’s stake in the Boston Red Sox.
The Times has put its 17.5 percent stake in the Red Sox up for sale, and recent news accounts have reported that the company has also offered to sell the Globe, too. The Financial Times reported last week that Connors was in talks with Times executives to buy the Globe and the Red Sox position.
‘There’s nothing to it,’ Connors told the Globe. ‘I’m not buying the Boston Globe. I’m not buying anything that the New York Times owns.’”
As denials go, that’s a fairly strong one. And while that doesn’t mean the Times can’t find someone else to buy its stake in the baseball team–it was reportedly seeking up to $300 million, while other estimates peg the value in the $170 million range–the market didn’t react well to the news. Shares in the Times’ beaten-down stock dropped more than seven percent in after-market trading.
The fate of the Boston Globe, sadly, doesn’t mean much for the Times in terms of solving its financial mess: A few years ago, former GE CEO Jack Welch was reportedly interested in spending up to $600 million for the paper; today it might fetch $50 million or so.
Late today the Times also announced that it had filed a shelf registration with the Securities and Exchange Commission–essentially a placeholder document that allows the company to move quickly with a debt or equity offering if it decides to pull the trigger. Spokesperson Catherine Mathis:
In these difficult markets, the Company wants to ensure that it has maximum flexibility and, accordingly, is filing a shelf that would permit it to offer both debt and equity.
But convincing investors to buy anything is only getting harder for the paper, given the miserable sales numbers it has been reporting: Even before the after-market drop, the stock was worth 60 percent less than it was a year ago.
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Comments
“But NYT does have a serious flaw in its capital structure. Its costs, which include servicing its pile of debt, appear to be too high to make the business viable.”
Weren’t those two sentences in the article?
Posted by Jeff Stevens at December 30th, 2008 at 3:36 am