Thursday, May 7, 2009

With cuts, Globe could become more attractive to potential suitors

For a newspaper that lost $50 million last year and is on pace to lose even more this year, The Boston Globe is decidedly more attractive to a potential buyer today than it was just a week ago, according to financial analysts, who pointed to steep pay cuts and modifications to lifetime job guarantees that union leaders negotiated with Globe management in recent days.

But the $20 million in concessions, as well as the flexibility that the Globe's parent company, The New York Times Co., stands to gain by stripping away some job guarantees, do not necessarily mean that potential buyers will be lining up to own a slice of Morrissey Boulevard, financial analysts cautioned.

Cuts or no cuts, the Globe is still on track to lose money this year, analysts said, and the newspaper industry's outlook as a whole doesn't look any better. As famed investor Warren Buffett said at Berkshire Hathaway Inc.'s annual meeting last weekend, he would not buy a newspaper right now "at any price" - and Buffett owns stakes in two US newspapers.


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