TIMES CO. PURCHASE OF PAPER RECEIVES NEWSROOM ACCOLADES Telegram & Gazette staff's relief may fade under new owner.
An accolade from another publisher? Kudos from some back-slapping editor? A platitude from an award?
No, the above quote came week before last from the Newspaper Guild local in Worcester, Mass., reacting to the news that the Times Co. had purchased the Telegram & Gazette in Worcester. The 107,400-circulation morning paper's reporters, copy editors and photographers wrote that line. It says something about newspapers today that the newsroom exhales a sigh of relief only when an organization with the prestige of the Times Co. buys in.
The acquisition, valued at $295 million and announced Oct. 14, brings the Telegram & Gazette into the fold with 21 other regional newspapers, the Boston Globe, three magazines, eight TV stations, two radio stations and the mothership, the New York Times. The seller, Chronicle Publishing Co. of San Francisco, is liquidating all its assets, including its flagship, the San Francisco Chronicle, and another regional newspaper, The Pantagraph of Bloomington, Ill. (see NewsInc., Aug. 30, 1999 and Oct. 11, 1999).
Russell Lewis, president of the Times Co., said in a press release that the combination of the Telegram & Gazette and the Globe would support a "clustering strategy of managing complementary markets." He went on to say that the combination of the two papers would "enable us to better serve readers and advertisers in the eastern half of Massachusetts."
It was not clear whether the administration of the Telegram & Gazette will reside within the New York Times Regional Newspaper Group or within the Globe, but comments on "clustering efficiencies" would lead one to believe that the Telegram & Gazette will begin a consolidation of at least back office and some advertising operations.
The company said the paper has a cash flow margin of 30 percent, which, if true, puts the Telegram & Gazette at the top of the list of papers in terms of margin. It also helps explain why the company paid such a high premium for the paper, which in early analysis was going to go for only about $200 million.
(This was also good news for Chronicle Publishing shareholders -- the Tobin-Thieriot, Martin and McEvoy families. Together with the sale price of the Chronicle and The Pantagraph, they have realized at least $1.1 billion.)
So, whether you couch terms as "managing complementary markets" or "clustering efficiencies," it's pretty clear that Times Co. bought Worcester because it believed that it could wring more profits out of it than other suitors. And some of those profits will undoubtedly come from workforce reductions.
Layoffs, in other words.
Nonetheless, the newsroom people were happy with the deal. That's because despite the fact that Times Co. operates its properties much the same as any other newspaper company, the paper in Manhattan has a huge reputation that transcends mere publishing.
Other suitors for the Telegram & Gazette could have come in and never discussed efficiencies, but raised the ire of the newsroom people nonetheless. Times Co. comes in and essentially telegraphs that it's going to do some layoffs and the Guild salutes the new owners.
The reputation of news organizations may not burnish the stock price or market value of a newspaper company, but it does seem to grease the skids in the business. A New York Times reporter, after a decade of toiling in the fields of lesser publications, once told me that his phone calls are always answered when he says, "I'm from the New York Times."
The workers in Worcester will be in for an interesting change, moving from the relatively hands-off management of Chronicle Publishing to the "managing complementary markets" strategy of Times Co. It will be interesting to find out how happy the Newspaper Guild is next year.