WGBH News contributor Dan Kennedy’s new book, “The Return of the Moguls: How Jeff Bezos and John Henry Are Remaking Newspapers for the Twenty-First Century,” examines whether a new generation of wealthy owners can help solve the financial crisis that threatens the beleaguered newspaper business. In this excerpt, Kennedy, an associate professor of journalism at Northeastern University, tells the story of how Red Sox Principal Owner John Henry decided to buy The Boston Globe from the New York Times Co.
Please join us either in person or via Facebook Live Tuesday May 15 at 4:30 p.m., when Kennedy will be interviewed by Beat the Press Host Emily Rooney at the WGBH studio at the Boston Public Library.
Rumors that The Boston Globe might be for sale began circulating as far back as 2006, when a group headed by retired General Electric chief executive Jack Welch, who was a Boston-area native, and local advertising executive Jack Connors was reported to be nosing around. At the time, the Globe was said to be valued at somewhere between $550 million and $600 million, vastly more than the price John Henry paid seven years later. But the New York Times Co. wasn’t selling — at least not yet. The following year, Ben Taylor, a former publisher of the Globe and a member of the family that had owned it from 1873 until selling it to the Times Co. 80 years later, told me in an interview for CommonWealth magazine that he might be interested in returning to ownership in some capacity if the Globe were put on the market. But he added that he thought such a development was unlikely. “I can’t imagine a scenario where that would be an opportunity,” he said, “but you never know, I guess. Stranger things have happened.”
Ben Taylor and his cousin Stephen Taylor, also a former Globe executive, became involved in a bid to buy the paper in 2009 when the Times Co. finally put the paper on the market. So did a Beverly Hills, California-based outfit known as Platinum Equity. With the Taylors thought to be undercapitalized and with Platinum having gutted the first newspaper it bought, the San Diego Union-Tribune, Globe employees were understandably nervous about their future. Although it was not a matter of public knowledge at the time, there was also a third possibility. After the Times Co. put up the Globe for sale, Brian McGrory, a popular columnist who was then serving a stint as the paper’s metro editor, decided to call around town to see if any public-spirited business executives might be interested. Among those he contacted was John Henry.
“I asked him at that time why he wouldn’t flip the paradigm,” McGrory told me. “It used to be that newspapers would own sports franchises. Why not have a sports franchise owner own a newspaper? Because without a healthy Boston Globe, which causes community discussion about a sports team — I made the argument, right or wrong; I have no idea if it was right — the value of a sports team might be diminished. And I did it because I thought he would be a very thoughtful, steady owner.”
Nothing came of it. The Times Co. pulled the paper off the market that fall and showed little interest in selling it during the next few years. But when the Times Co. put the Globe on the market again in 2013, Henry reached out to McGrory, who by then had succeeded Marty Baron as editor. (Baron is now the executive editor of The Washington Post.) “We had a long, long lunch,” McGrory recalled, “during which he said he was not interested in buying the Globe, but that he would like to partner with NESN and Boston.com” — that is, New England Sports Network, in which the Red Sox held a majority ownership share, and the Globe’s free website. “We must have sat for three hours discussing the possibilities. And then, next thing I know, he surfaced as a bidder for the Globe.”
Still, Henry would have to overcome a series of obstacles, including other potential buyers and his own self-doubts. Jack Connors, who had partnered with Jack Welch in 2006, was back in the picture, as was local developer John Fish. Steve and Ben Taylor were making another run, this time in league with Jack Griffin, a former chief executive of Time Inc. So were several out-of-town possibilities, including Douglas Manchester, a San Diego developer who had bought the Union-Tribune from Platinum Equity in 2011. Under Manchester’s ownership, the Union-Tribune — which he unforgivably renamed U-T San Diego — was run “like a brochure for his various interests,” in the words of the late New York Times media columnist David Carr. Manchester was known as “Papa Doug,” and according to an account in Boston magazine, he urged McGrory to call him that when they met during the pre-sale period. McGrory declined.
“It felt like every kook and crook was walking through here, kicking the tires on whether to buy us, and it was really goddamn scary,” McGrory told me when I asked him about his encounter with Papa Doug. “There were a couple of good potential outcomes, but I’ll be honest, I was scared to death. I feared for the future of this organization at that time. Doug Manchester was certainly one of the things that I feared. There were others, too: Digital First Media for a while seemed very, very serious about this. That scared the hell out of me. Aaron Kushner — who I’d never met, seems like a fine guy — scared the hell out of me.” (Digital First, whose majority owner is the hedge fund Alden Global Capital, has become notorious for slashing staff at its newspapers, which include three in Massachusetts: the Boston Herald, The Sun of Lowell, and the Sentinel & Enterprise of Fitchburg. Kushner, a Boston-based entrepreneur who’d previously sought to buy the Globe in 2010, led a group of investors that purchased the Orange County Register in 2012. Kushner implemented a wildly ambitious expansion scheme that ultimately led to bankruptcy. The Register is now owned by Digital First.)
John Henry, meanwhile, was pondering his options. His original idea was to bid for the Globe through his Fenway Sports Group, which owned the Red Sox, NESN, a soccer team in Liverpool, and other interests. Henry also considered putting together a proposal to run the Globe as a nonprofit organization. But McGrory discouraged him on the nonprofit idea, and Henry eventually changed his mind. “I view it as waving the white flag,” Henry told me. “If you don’t see an end game, you can at least get a tax deduction for giving it away.” Finally, Henry decided to make a personal offer, without partners, to avoid conflicts of interest and so that he could run the Globe as he saw fit. “I made the decision that prospects were so dark that I could not in good conscience bring them along,” he explained. “I realized that there were such tough decisions that had to be made that in order to make them I had to be insulated from partners.”
There were some bumps along the way. One low point came in late spring or early summer of 2013. Henry had dropped out of the bidding. That day’s Red Sox game had been rained out. Henry and his business partner Tom Werner were in the upstairs bar at Post 390, in downtown Boston, when they spotted McGrory and several friends. Werner approached McGrory and asked him to join them. “I stopped by,” McGrory said, “they asked me to sit, and John said very directly something to the effect of ‘I’m out. I’m not buying the Globe.’ I said something to the effect of ‘What the hell happened?’” What had set Henry off, McGrory recalled, was that he thought the Times Co. wasn’t providing him with accurate information about the Globe’s finances. But Werner was convinced that it was too soon to rule Henry out. “As I said goodbye,” McGrory said, “Tom said something like ‘You haven’t heard the last of John. He’s going to buy the Globe.’”
What changed Henry’s mind and put him back on track was a weekend in Nantucket with his wife, Linda Pizzuti Henry. She was originally opposed to buying the paper. Among other things, the Henrys were raising two young children, and owning and running the Globe struck her as a commitment too far. But as Henry recalled, during a walk in Nantucket his wife was “just miserable that I had pulled out a week or two earlier.”
Interestingly, Pizzuti Henry doesn’t remember it quite that way. She told me it was her husband who was miserable that weekend. “That day walking in Nantucket — a Sunday, I believe — he called his personal lawyer, and we decided to move forward on our own,” she said. “He really wanted to be a part of putting the Globe on a sustainable path.” Regardless of who was more miserable than whom, Pizzuti Henry would become a visible presence at the Globe, more so than her husband, assuming the title of managing director and involving herself in matters such as sitting in on editorial-board meetings, taking charge of Boston.com, and creating, along with local universities, a Globe-branded annual series of events called HUBweek. “I am so proud to work at the Globe,” she said. “I love being there, I am inspired by the people that I get to work with. It is a distinct feeling to know that the work that you do really matters, and has a big impact. We convene on issues that matter. The business challenges are real and frustrating, but we are making progress.” A Boston magazine profile described Pizzuti Henry as “the public face of Boston’s premier power couple, the one who moderates panels and emcees charity events.” And given that she is nearly thirty years younger than her husband, it is not unreasonable to imagine that she will be the paper’s publisher someday.
The deal was announced on Saturday, Aug. 3, a day after Peter Gammons — a former Globe baseball writer who had worked for Henry at NESN — broke the news on his blog. The terms were staggeringly favorable to Henry. In return for $70 million, he would receive the Globe and its real estate as well as the Telegram & Gazette of Worcester, two papers for which the Times Co. had paid a total of about $1.4 billion. (In a controversial move, Henry later sold the T&G to an out-of-state company after reportedly telling the newsroom that he would keep it if he couldn’t find a local buyer. The paper is now owned by GateHouse Media, a national chain based in suburban Rochester, New York.) Henry would also acquire Boston.com, the Times Co.’s 49 percent stake in Boston Metro, a free tabloid aimed at commuters, and GlobeDirect, a direct-mail marketing company. He wouldn’t even have to assume the Globe’s pension liability, estimated at $110 million.
Some of the other prospective buyers had offered more. But Times Co. executives were said to be swayed by two factors: Henry was willing to pay cash, making for an uncomplicated, straightforward transaction; and company officials were reluctant to take the public-relations hit that would have come by selling to owners who would turn around and make drastic cuts. In a way, it was like the Red Sox deal all over again. Just as Major League Baseball maneuvered to bring Henry into the fold in 2001, so too did the Times Co. steer the Globe to Henry, leaving money on the table in order to ensure that the paper would be in safe hands. Henry was both civic-minded and wealthy. For a newsroom — and a region — worried about the likes of Papa Doug Manchester coming to town, Henry’s emergence was very good news indeed.
Excerpt from “The Return of the Moguls: How Jeff Bezos and John Henry Are Remaking Newspapers for the Twenty-First Century,” by Dan Kennedy. Published by ForeEdge, an imprint of University Press of New England. www.upne.com/1611685947.html