Don Bauder 5:30 p.m., March 14
If Boston Globe Worth $20 Million, Is U-T Worth $15 Million?
Rumors that the U-T is considering a bid for only $15 million were so startling to me that I was reluctant to post that suggested price in the blog entry below. However, it has been pointed out to me that in late December, a report on the worth of the New York Times by Barclays Capital valued the Boston Globe, owned by the Times, at $12 million to $20 million. The Wall Street Journal and New York Times itself printed the $20 million estimate at that time. I have retrieved the Barclays study. It estimates that cash flow for the Globe this year will be only $4 million. Barclays is valuing the paper at only 3 to 5 times that cash flow. The Times's 17.5% stake in the Boston Red Sox is valued at $140 million to $166.25 million. Many investors have been astonished by the Barclays report. Some thought the estimated Globe valuation was a typo. And there are some minor mistakes in the report (such as spellings) that suggest a certain sloppiness. The Times paid more than $1 billion for the Globe in 1993. While such deflation seems improbable, the valuations of newspapers, particularly dailies, in the stock market have been almost as severe. As reported below, the debt rating of Black Press has fallen more deeply into junk territory. Standard & Poor's says that the company's major debt problem is the money it paid for the Akron Beacon-Journal in 2006. Black's Canadian papers, consisting of most that it owns, give it a cushion, says S&P. So would Black buy another American paper, even at such a low purported price? (I also want to stress that it is not clear whether the value of Globe or U-T real estate assets are included in the reports floating around.)