The Times Company threatens to shut down The Boston Globe
04 Apr 2009
With the effects of recession deepening, another major American newspaper may be on the verge of shutting down. The New York Times Company has threatened to close The Boston Globe unless labor unions agree to $20 million in concessions like pay cuts and the cessation of pension contributions.
The union officials said executives from the Globe and the Times, which own the Boston newspaper, made the demands on Thursday morning in a meeting with leaders of the newspaper's 13 unions, the Globe reported. The management said that without the concessions, The Globe would lose $85 million in 2009.
If the Globe closed, it would join a growing list of big city dailies that have shut down this year, including EW Scripps Co.'s Rocky Mountain News and the print edition of Hearst Corp's Seattle Post-Intelligencer. Hearst's San Francisco Chronicle might join that list. (See: Chicago Sun-Times files for bankruptcy protection / Colorado's oldest newspaper Rocky Mountain News folds up / Hearst looking for buyer for Seattle Post-Intelligencer newspaper / San Francisco Chronicle on verge of going bust: Hearst)
The Times Company paid $1.1 billion for The Globe in 1993, the highest price ever paid for a single American newspaper, and it was highly profitable through that decade. But in recent years, the erosion of advertising and newspaper circulation has been more severe in the Boston area than in most of the country.
The Times Company also wants to end a provision in The Globe's contracts that gives certain employees lifetime job guarantees. The company recently revealed that it was asking most of its employees, including the bulk of those at the flagship New York Times newspaper, to take a 5 per cent pay cut for the remainder of this year. The company has recently scrambled to borrow money and sell assets to raise cash to weather the downturn.
The Globe last year reported weekday circulation of 324,000, the 14th highest in the country, and Sunday circulation of 504,000, the 11th highest.