Double Play 

The Boston Globe’s fire-sale price tag raises the question: Is the paper undervalued now or was it overvalued two decades ago?

When I grew up in Boston, a long time ago, there were two real franchises in town. Only one of them involved sports, that one being the Boston Red Sox.  The other franchise wasn't a sports team at all but a newspaper. Not just any newspaper; The Boston Globe back then was one of America's best. As a teenager, I got on my bike every morning and delivered copies to about 50 homes in my neighborhood. Then I read every page over breakfast. To this day, I consider The Boston Globe the cornerstone of my education.

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My day usually started with the sports section, especially during baseball season. This past weekend, then, was a big deal for me, when word trickled out that these two preeminent institutions from my childhood would be getting married, so to speak. It's something of a shotgun wedding, though, since Red Sox owner John Henry has convinced The New York Times Company to let him take the Globe off its hands for the not-so-princely sum of $70 million. 

Back in 1993, the Times purchased the Globe from the Taylor family, its longtime owners, for $1.1 billion. John Henry acquired the paper for 6.8 percent of that amount. The purchase price pretty closely matches the appraised value of the Globe's extensive real-estate holdings in downtown Boston. The actual newspaper, evidently, was just a throw-in. 

The news reports about this fire sale, of course, have focused largely upon its "How the mighty have fallen!" aspects. But perhaps it's worth looking at this particular deal through the other end of the spyglass. Has the Globe lost 93 percent of its value over the past 20 years, or is the real issue the fact that its valuation in 1993 was patently absurd?

I lean toward the second interpretation. In the early 1990s, morning daily newspapers enjoyed de facto media monopolies in most major markets. Afternoon dailies had gone the way of the dodo in the wake of the Television Revolution, so owning one of these monopoly dailies — or one of a couple of mega-dailies in larger cities like Boston — was a license to print money. Profit margins were obscene, as advertisers felt obliged to pay extortionist ad rates in order to reach potential customers in their urban markets. But while their stock prices were soaring, daily-newspaper moguls were not paying attention to how their markets were changing before their eyes.

Long before the internet ever became a factor, all kinds of alternative publications (like this one, founded in 1989) were springing up in cities across America. Readers weren't content with one newspaper giving them all their news; local businesses didn't want all their advertising dollars held hostage by a monopoly daily. And long before print started "dying," the writing was already on the wall for those who thought their golden geese would never stop laying eggs. The coming of the web was never the sole cause of daily newspapers' decline; it was simply part and parcel of the destruction of these monopolies that had already begun.

Today, a hundred flowers bloom in the media gardens of urban America. There are still, mind you, many viable (if not exorbitantly profitable) dailies that do quality work, but there are also local business publications, weekly news journals, city magazines, and niche publications of every shape and size, catering locally to seniors, to parents, to wine lovers, on and on. And the really good news is that just about all of us in this business are now fully ambidextrous, doing good work online and in print with equal felicity.

The smart (and lucky) ones among us make ends meet. We'll never get rich, and we'll never be Wall Street's darlings. But we do the jobs we set out to do, provide decent livings for the people who do it, and have fun in the process. We are now, well, community franchises ourselves.

Meanwhile, has anyone ever wondered whether modern sports franchises just might be today's version of the overvalued daily-newspaper dinosaurs of the 1990s? On Tuesday, founder Jeff Bezos plunked down $250 million to purchase The Washington Post, buying "America's newspaper" for the near-equivalent of the 11-year contract the Los Angeles Angels gave last year to all-star first baseman Albert Pujols.

Pujols or the Post? Ask yourself who's more valuable. Right now, it's not even close, since Pujols is injured and out for the rest of the season. Maybe the Angels should consider trading him and a couple of draft picks for the Orange County Register.

Kenneth Neill is the publisher and founder of the Memphis Flyer.

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