New York Times Co. Looks to Sell Boston Globe
After months of speculation, the New York Times Company has announced it's looking to sell the Boston Globe and all properties that comprise the New England Media Group.
This follows the Times Company's sale of other regional papers as well as the About.com group, as it focuses in on its core asset — the New York Times brand. And with that focus, the publisher is honing in on what's really been working for the company — the New York Times subscription model.
The company has retained Evercore Partners to advise on and manage the sale, but won't say who it's already talked to, or how much it thinks the assets are worth.
Citi analyst Leo Kulp, who calls this a "positive move," estimates that the segment could fetch about $200 million. The segment generated $395 million in 2012 revenue, which Kulp says implies about $67 million in EBITDA in 2012. He applies a three times multiple — "on the high end of comparable large metro newspaper sales" — to give the paper a $200 million price tag.
JP Morgan's Alexia Quadrani has a lower valuation, expecting the New England Media Group to sell for closer to $100 million. But she also applauds the idea, saying it makes sense for the publisher both strategically and financially.
Ed Atorino, an analyst with Benchmark, says that getting rid of non-core assets could be a step towards the Sulzberger family eventually taking the New York Times private.
(Read More: Time Warner Explores Magazine Sale)
Who are potential buyers? Perhaps a newspaper conglomerate like Gannett, which could take advantage of economies of scale. Jack Welch reportedly considered buying the Globe back in 2006 when its valuation was as much as three times as high.
It's no surprise that New York Times is looking to sell off the Globe in light of the declines the print industry is expected to suffer in coming years. eMarketer estimates that U.S. newspaper print ad revenues will drop to $16.4 billion in 2016 from $19.14 billion in 2012.
Digital revenues will make gains, but not enough to compensate for print losses: growing to $4 billion from $3.4 billion in the same period. The Globe is gaining digital subscribers, ending 2012 with 28,000, up 8 percent from the end of the third quarter.
—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin