Red Sox owner in deal to buy Globe
Henry’s offer prevails after negotiations run into early morning Two decades of New York Times Co. ownership nearing end
Boston Red Sox principal owner John Henry entered into an agreement early Saturday to buy The Boston Globe, a deal that will put the 141-year-old newspaper, its websites, and affiliated companies into the hands of a personally shy businessman with a history of bold bets.
The impending purchase for $70 million in cash marks Henry’s first foray into the financially unsettled world of the news media.
“The Boston Globe’s award-winning journalism as well as its rich history and tradition of excellence have established it as one of the most well respected media companies in the country,” Henry said in a statement. He cited the “essential role that its journalists and employees play in Boston, throughout New England, and beyond.”
Henry, 63, made his fortune in investment funds and has built a sports empire that includes the Red Sox and New England Sports Network, as well as the Liverpool Soccer Club and Roush Fenway Racing, a NASCAR team.
A Quincy, Ill., native and a son of soybean farmers, Henry turned his knowledge of agricultural crops into a complex commodities-investment business, managing $2.5 billion at its height. Since Henry bought the Red Sox with partners Tom Werner and Larry Lucchino in 2002, the team has won two World Series championships following an 86-year drought.
Henry, who lives in Brookline, said he would disclose more details about his plans for the company in coming days.
“This is a thriving, dynamic region that needs a strong, sustainable Boston Globe playing an integral role in the community’s
long-term future,” he said. In buying the Globe and its websites, BostonGlobe.com and Boston.com, Henry bested a field of more than a half dozen bidders, including members of the Taylor family who sold the Globe to the Times Co. in 1993. Other bidders included local business people andWest Coast investors.
As part of the agreement with the Times Co., Henry also will acquire the Worcester Telegram & Gazette newspaper and its website, as well as the Globe’s direct mail business and a 49 percent interest in the Metro Boston commuter newspaper.
Bill Grueskin, dean of the Columbia Journalism School, said the Globe is likely to benefit from a local owner. “Having somebody with roots in the community and an intrinsic interest in local coverage and local government is better than having some from out of town,’’ he said.
Henry’s lack of newspaper experience won’t likely be a liability, Grueskin said. “What the Globe needs now is not so much a journalism guy as someone with strong business credentials and the integrity to keep the business separate from the journalism,” he said.
In a statement, Boston Mayor Thomas M. Menino offered his congratulations to Henry and the Globe, calling them “two of Boston’s best leaders with a rich history of success in building Boston’s brand.”
“I have no doubt this will be a winning combination,” Menino said.
The deal brings under one owner two Boston institutions that have been connected before. The Times Co. owned a minority 17.5 percent stake in the Red Sox from 2002 to 2012, reaping a $150 million profit on the investment.
During that period, the Globe continued its normal coverage of the team and routinely disclosed in news stories that the Times Co. was a partial owner of the Red Sox.
The Globe-Red Sox history also goes back further — all the way to the early 1900s, when members of the Taylor family owned the Red Sox and built Fenway Park.
Even so, the deal is sure to spark debate in journalism circles and among Globe readers about whether the Globe’s coverage of the Red Sox, which regularly includes critical commentary, will be affected.
“We have no plans whatsoever to change our Red Sox coverage specifically, or our sports coverage in general, nor will we be asked,’’ Globe editor Brian McGrory said Saturday. “The Globe’s sports reporting and commentary is the gold standard in the industry.”
The Times Co. is selling the Globe for far less than the $1.1 billion it paid for the paper in 1993, when the business was highly profitable and the Globe fetched a record price. The Times Co., like other business owners, withdrew a large stream of cash from the Globe during its ownership — a sum at least equal to the purchase price, according to several former high-ranking Globe executives.
Henry would be taking ownership of the Globe during a period of dramatic changes in the newspaper industry, as print advertising revenues at papers nationwide continue to slide and readers increasingly want to consume news online, where revenues are improving but are still much lower than traditional newspaper advertising.
Many newspaper transactions over the past decade have been tumultuous, as new owners took on massive debt at the same time the business was struggling. Major news outlets such as the Chicago Tribune, the Los Angeles Times, the Philadelphia Inquirer, and the Minneapolis Star Tribune have ended up in bankruptcy, amid deep cost cuts and layoffs.
In 2009, the Times Co. tried to sell the Globe, but it took the paper off the market because it did not fetch the price it was seeking. It received wage concessions from the newspapers’ union members and management after threatening to shutter the paper because the company was losing money.
The Globe’s financial health is stronger now, but the company is still working to turn around declining advertising revenue, a problem that persists industrywide.
Henry is known for his keen grasp of numbers and a disciplined approach to statistics and analysis that he brought to commodities futures and to the Red Sox. His models for making smart bets on the market, he told the Globe in 2004, focused on “what is, not what should be.”
After many years of investment success, the funds managed by John W. Henry & Co. began to falter after the financial crisis. Henry shut down the hedge fund firm last year, although it continues to manage his personal money.
When asked last year about whether his financial resources were diminished in such a way that it could affect his Sox ownership, Henry said, “I have no interest in reducing that. If anything, I expect it to increase over time.”
While Henry has shown himself to be a long-term investor, how he plans to run the Globe is still largely unknown.