• by Erik Sass  @eriksass1, August 5, 2013

The separate sales of The Boston Globe and Newsweek, announced over the weekend by The New York Times Co. and IAC, respectively, offer benchmarks for charting print’s dramatic decline over the last decade, as both audiences and advertising revenues have dwindled to a fraction of their former size.
 
NYTCO announced Saturday that it was selling The Boston Globe and other properties in its New England Media Group, including the Worcester Telegram & Gazette, to Boston Red Sox owner John W. Henry for a total $70 million. Henry beat out other bidders, including Robert Loring, owner of The Tampa Tribune, and Ben and Steve Taylor, members of the family which owned the Globe before NYTCO.

That price represents a 93.6% discount over the $1.1 billion paid for the newspaper in 1993, although the new price tag doesn’t include expenses in the form of liabilities like future employee benefits and debt.
 
The Globe’s collapsing valuation reflects dire challenges to its business model as media consumption transitions to digital platforms. Like many other regional newspapers, over the last few decades the newspaper has seen its circulation plunge, with average daily weekday circ tumbling 51.6% from 506,996 in 1993 to just 245,572 in 2013, according to the latest figures from the Alliance for Audited Media. Most of that decline came in the last 10 years.

Total revenues at NYTCO’s New England Media Group fell 44.1% from a peak of $706 million in 2004 to $395 million in 2012, with advertising revenues decreasing 61.3% from $481.6 million to $186.2 million.
 
NYTCO has been blunt about its desire to offload its New England division, although key shareholders led by the Ochs-Sulzberger family have previously balked at offers they considered too low. In 2006, former GE boss Jack Welch offered to buy The Boston Globe for $600 million, but NYTCO rejected the offer. In 2009, NYTCO first threatened to close the paper if unions didn’t make concessions on pensions and benefits, then put the paper up for sale once these concessions were made.

It subsequently received three proposals from 2009-2011, among them a bid from a group of Massachusetts investors and businessmen including the Taylors, who offered more than $200 million for the New England Media Group, but the company rejected all these. NYTCO has also sold its stake in Henry’s New England Sports Ventures, which owns the Boston Red Sox and associated cable TV properties.
 
Also over the weekend, IAC sold Newsweek to the International Business Times, severing the relationship between Newsweek and The Daily Beast, which IAC retained. Newsweek’s fall over the last decade has been even more dramatic, culminating the shuttering of the iconic news mag.
 
According to the AAM, Newsweek’s total print circulation plunged 53.8% from 3.31 million in the six-month period ending December 2001 to 1.53 million in the six-month period ending December 2012, when the magazine was finally closed. Over the same period, according to the Publisher’s Information Bureau Newsweek’s total ad pages plunged 62.3% from 2,088 in 2003 to 788 in 2012.
 
The beleaguered newsweekly traded hands repeatedly as its valuation shrank. The Washington Post Co., which bought Newsweek for $9 million in 1961 (about $68 million in 2012 dollars), ended up selling the magazine to stereo magnate Sidney Harman for $1, plus assumption of $40 million in debt and pension liabilities, in August 2010, Harman merged Newsweek with the Daily Beast in November 2010.

Harman died in April 2011 and in July 2012, the Harman family stopped contributing to the money-losing combination, leaving Daily Beast backer IAC holding the bag. IAC chairman Barry Diller made it clear that he intended to unload Newsweek as soon as possible, telling Bloomberg TV in April of this year: “I wish I hadn't bought Newsweek, it was a mistake.”

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