New York Times Co. Will Hold On to Boston Globe - NYTimes.com

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By RICHARD PÉREZ-PEÑA

After months of hunting for a buyer, The New York Times Company said on Wednesday that it had decided not to sell The Boston Globe, the newspaper it threatened last spring to close because of mounting losses.

The Globe did not draw high bids, and the company chairman, Arthur Sulzberger Jr., said last month that the paper’s finances had improved enough that the company no longer believed it had to sell if the offers were not attractive enough.

Executives said this year that the paper was on track to lose $85 million in 2009, before making painful cost cuts that included wage, benefit and job security concessions from union employees. But even after those expense reductions, analysts say, The Globe probably does not operate in the black.

Two bidders made preliminary offers for The Globe and another paper, The Worcester Telegram & Gazette, of about $35 million and the assumption of pension obligations. At least one prospective buyer, a local group led by Stephen E. Taylor, a former Globe executive whose family owned the paper for most of its history, submitted an updated offer last week. The other bidder was Platinum Equity, a private equity firm based in Beverly Hills that recently bought The San Diego Union-Tribune.

People briefed on the matter, who were not authorized to discuss it publicly, said that Platinum lost confidence that it could close the gap between its offer and what the Times Company wanted, and that Times Company executives, who would have preferred to sell to Mr. Taylor’s group, had raised questions about how solid its financing was.

Platinum declined comment.

Mr. Taylor said, “I wish that it had happened, but it’s The Times’s prerogative to make whatever they feel is the best decision for them,” adding, “I want the very, very best for The Globe in the future.”

The company broke the news that it would keep The Globe to the paper’s employees just after 5 p.m. by e-mail. The message said the Times Company was still looking at the possibility of selling The Telegram & Gazette, and that Janet L. Robinson, the company’s chief executive, would be in Boston on Thursday to address Globe employees. Company executives declined to make any other statement.

Even before this year’s crisis, The Globe, like most major American newspapers, had sharply trimmed its staff through buyouts and layoffs, and it had frozen salaries for several years. The contract concessions were a hard pill to swallow for workers, many of whom said they felt mistreated by the company.

There was a particularly bitter showdown with the largest union, the Boston Newspaper Guild, whose members voted in June to reject the first contract proposal, only to have the company respond with a unilateral 23 percent pay cut. The guild accepted a modified proposal weeks later.

Dan Kennedy, a journalism professor at Northeastern University who has closely followed The Globe’s troubles, said it might be better for The Globe to remain with the Times Company than to go to a new owner that might do more cutting or replace top executives. “But the company has its work cut out for it in terms of rebuilding credibility with the employees and the community,” he said.

“I’m really just happy the uncertainty is over,” Patricia Wen, a reporter, said. “It’s not a statement about whether I preferred one owner over the other.”

Another reporter, Beth Daley, said the decision was not a surprise, given Mr. Sulzberger’s comments and the lukewarm response from buyers. But she said she hoped the company would try to earn good will with employees by restoring some health care cuts.

The Times Company paid $1.1 billion for The Globe in 1993. It was by far the highest price paid for a single newspaper to that time, and it was solidly profitable during that decade. But in the last few years, as a steep advertising downturn has battered the industry, The Globe has suffered more than most, in part because of the loss of crucial New England-based advertisers.