Tuesday, August 06, 2013

The Price is the Message

If the medium is the message, as that late, great Canadian philosopher, Marshall McLuhan, asserted, then so is the price.

And the message also includes how the sale is handled. 

In fact, these two parts – the price and how the sale is managed – signal everything about the seller, from what they think of the new owner, as well as the other bidders, to how they view the property they’re selling, maybe even its customers.

And so in The Boston Globe’s sale to Red Sox owner John Henry, two conclusions can be drawn about Arthur Sulzberger, Jr. 

First, Arthur and his executives handled the sale poorly as it came to light that other bidders offered more for the paper than Henry’s winning bid of $70 million.

Of particular interest was a group in California, which also owns the San Diego Union-Tribune.  Word is they offered Arthur more for The Globe than anyone else.

While it's Arthur's prerogative to accept or reject offers, his approach to The Globe sale could place him in hot water should the company’s shareholders think he failed to maximize the newspaper’s value.

As Bloomberg News reported in June, Times executives were expecting bids in the $100 million range.  As Times executives were reviewing the bids, The Globe reported that Henry’s offer was among the lowest.

Meantime, the American Thinker reports John Lynch, the San Diego Union-Tribune’s chief executive officer, saying, "’We had the money in the bank, we had the highest price and we rolled over (Friday) and accepted all their (Times' executives) terms.’”

So why did Arthur reject the owners of the Union-Tribune?  Could it be because their politics lean right and he fears a right-wing Boston Globe editorial page?  Or did he just dismiss them out of hand because he knows Henry? 

Or was he looking to sell to someone whose knowledge of the newspaper business is minimal?  Which, in the not too distant future, will make The Times’ ownership of The Globe look outstanding.

These questions may never be answered.

Of course, a price like $70 million for a property that should command so much more, makes me wonder if it's Arthur’s reflection on what he truly thinks of The Globe:  It’s a run-down property, with little to offer; at $70 million, it’s a cheap whore with lousy Johns.

One thing is certain:  Members of the Bancroft family, the former owners of Dow Jones and the storied Wall Street Journal, can hold their heads high:  They sold their company for premium to an executive who knows the ins and outs of the newspaper business. 

So much for the scion of the Great Gray Lady – he’s a weak executive who needs to be forced out.

No comments: