The Beverly Hills investment firm that recently purchased the San Diego Union-Tribune, a local newspaper, has made an offer to buy the struggling Boston Globe and a sister paper, according to a news report.
Platinum Equity is the third bidder to put in an offer for the newspapers, the Globe reported today. Sources told the Globe that “Platinum’s offer is $35 million, plus the assumption of $59 million in pension liabilities.”
Until fairly recently, that price would have been considered remarkably low for the nation’s 17th largest newspaper. In fact, the New York Times Co. bought the Globe for $1.1 billion in 1993, a price equal to more than $1.6 billon today when adjusted for inflation.
The Globe has won eight Pulitzer Prizes since 1993.
But like the U-T and many other metropolitan newspapers, the Globe has suffered a stunning reversal of fortune in recent years. It has been shellacked by the internet revolution, falling readership and a sharp decline in advertising revenues.
“While the Globe delivered hundreds of millions of dollars in profits to the Times Co. over many years, it has recently been a drag on earnings,” the Globe reported. “All of the bids appear to be modest, coming at the bottom of a recession and amid deep questions about the future of the news business.”
For its part, Platinum Equity has a history of buying companies in trouble and trying to turn them back to health. In May, it bought the U-T, the nation’s 25th largest paper, though the sales price — and what, if any, debt Platinum assumed — remains officially unannounced.
More recently, Platinum Equity tried to buy the bankrupt auto-parts maker Delphi.
Analysts speculated that the investment firm was more interested in the U-T’s real-estate holdings — including a prime piece of property in Mission Valley — than the newspaper itself.
The Globe said the bidders appear to want to buy the newspaper along with a sister publication, the Worcester Telegram & Gazette, and their websites.