T&G for sale by Times Co.,
maybe packaged with Globe

The Telegram & Gazette of Worcester, Mass., is reportedly up for sale by its parent company, The New York Times Co., the Telegram & Gazette reported June 21.

The Times Co. wants to sell the Telegram & Gazette and The Boston Globe as a package, the Globe later reported.

The Times Co. purchased the Telegram & Gazette in 2000, reportedly for nearly $300 million, and made the paper part of its New England Media Group. The group includes The Globe, Boston.com and Globe Direct, a direct mail business that operates from the Telegram & Gazette’s Millbury, Mass., printing plant. The Times Co. paid $1.1 billion for the Globe in 1993, the highest price ever for a newspaper, and the Globe is also reportedly for sale.

Industry analysts have valued the Telegram & Gazette at $10 million to $50 million, with the most common estimates coming in at $20 million to $25 million, the Telegram & Gazette reported.

According to tax assessment records, the Telegram & Gazette’s main office on Franklin Street in downtown Worcester is valued at about $3 million and its Millbury printing plant is valued at about $7 million.

The New York City-based investment company, Goldman Sachs, has been retained by the Times Co. to handle the solicitation of bids for the Globe or “other” New England Media Group properties, the Telegram & Gazette reported.

In a confidential letter from investment bankers at Goldman Sachs obtained by The New York Times, the Times Co. has set a deadline of July 8 for initial, non-binding bids, the Times reported June 27.

The Globe reported that sources briefed on the sale said the letter stated that a buyer would have to assume the papers’ $59 million in pension liabilities — $51 million for the Globe and $8 million for the Telegram & Gazette.

Potential bidders for the Telegram & Gazette, the largest daily in Central Massachusetts, include Bruce Bennett, a former Telegram & Gazette publisher who retired in 2006; David “Duddie” Massad, principal owner and chairman of Worcester-based Commerce Bank & Trust; and Frederick Eppinger, president and chief executive officer of the Worcester-based Hanover Insurance Group, according to the Telegram & Gazette.

Bennett and Massad told the Telegram & Gazette that their interest in the paper would be as members of a group of investors. Eppinger declined to be interviewed.

Bruce Gaultney, the Telegram & Gazette’s publisher, declined comment on a possible sale.

Catherine Mathis, Times Co. spokeswoman, told the Telegram & Gazette that the company has a strict policy prohibiting comment on “rumors about potential acquisition or divestitures.”

The Times Co. does not report revenues for its individual papers to shareholders, but industry sources say the Telegram & Gazette realized a profit of about $1 million last year, the paper reported. The Globe reportedly lost about $50 million last year.

Industry sources said the Telegram & Gazette’s revenues have been falling in recent years, and the 2008 profit figure is primarily the result of expense reductions, including staff cuts.

According to the latest report from the Audit Bureau of Circulations, the Sunday Telegram had a circulation of 90,769 for the six-month period ending March 31 and the six-day average weekday circulation was 78,479 for that same period.

The same report said the paper’s Web site, Telegram.com, had 629,704 unique visitors in March and more than 9 million page views in that month.

Analysts have said the Times Co. would prefer to sell the New England Media Group as a package, the Telegram & Gazette reported. But the sale of any of the group’s properties is not considered likely to occur before July 20, when the Globe’s largest union, the Boston Newspaper Guild, is scheduled to vote on a revised contract with the Times Co.

John Hill, president of the Providence Newspaper Guild, which includes members from the Telegram & Gazette, told the Telegram & Gazette that he had not been contacted about a potential sale.

The Telegram & Gazette also reported that the adult children of a well-known Worcester lawyer, the late John Spillane, might be interested in owning a piece of the paper.

Another possible investor named by the paper is James Donnelly, a lawyer with the Worcester, Boston and Westboro, Mass., law firm of Mirick O’Connell. Donnelly told the Telegram & Gazette that he has an interest in such a venture, but has not been approached by anyone or begun discussions himself.

“I couldn’t conceive of a city that is the second biggest in New England not having a daily newspaper,” Michael O’Brien, Worcester’s city manager, told the Telegram & Gazette. “All of us are watching closely the shakeout in the newspaper industry. It is necessary for us to have a strong paper to maintain our regional identity.”

This report was written from published reports by Jennifer Skala, a graduate student at the Northeastern University School of Journalism and a news staff coordinator for the Bulletin.

POSTED 7/2/09