BOSTON/NEW YORK – Jack Welch, the former General Electric Co. (GE) boss, and advertising executive Jack Connors are considering making an offer for The Boston Globefrom The New York Times Co. (NYT), a spokesman for Connors said on Wednesday.
Describing the plan as preliminary, the spokesman said the two businessmen are working with JPMorgan Chase & Co. (JPM) and other local investors, but have not talked directly with the Times.
The news was first reported on Wednesday by The Globe, which said JPMorgan had valued the newspaper at $550 million to $600 million. That would be far below the $1.1 billion the Times paid in 1993.
"They have talked to JPMorgan Chaseso there have been conversations on that level, but the conversations have not progressed to where the group has approached The New York Times," said the Connors spokesman, Will Keyser.
"At this point, the conversation is among friends, among investors and among people who may be interested in looking at The Globe," Keyser said.
Connors said that a deal was not certain, while Welch declined comment through a spokeswoman.
"I have conversations about possible business deals all the time and 90 percent of them never move forward," Connors said in a statement emailed to Reuters.
The Globe said Welch and Connors are looking to assemble a small group of local business people for a bid that would include debt and equity.
The newspaper, quoting executives involved in the talks, said each man had tentatively committed $25 million to the deal. A third partner, Boston concessionaire Joseph O'Donnell, also has committed $25 million, the Globe said.
Welch, a Massachusetts native who left GE (GE) in 2001, now teaches at the Massachusetts Institute of Technology's Sloan School of Management.
Connors is a founding partner and chairman of Boston advertising agency Hill Holiday.
Some media analysts have said it would make sense for the Times to sell the Globe following a steady erosion in circulation and ad revenue. Like many dailies, the Globe is struggling to hold on to advertisers and readers amid growing Web-based competition.
But Benchmark Co. analyst Edward Atorino countered that the Times might wait for a rebound in retail advertising, which has dried up amid industry consolidation and store closings.
He pointed to plans by department store company Nordstrom Inc. (JWN.N) and Neiman Marcus to open stores in the Boston area starting next year.
"Business has been terrible at the Globe, but the Times, I think, hopes it'll bottom out in the next six months," Atorino said.
The Times and the Boston Globe declined to comment on "potential acquisitions or divestitures." JPMorgan also declined comment.
"We constantly review our portfolio of properties to assess their continuing relevance to our strategy," Times spokeswoman Catherine Mathis said. "We view the Globe as an important asset, and we have taken many steps that we believe will improve its performance."
Revenue at the Times' New England group, which includes The Boston Globe, fell 8.9 percent to $149 million in the third quarter. Some analysts speculate the Globe is headed for its first unprofitable year in recent history.
The Globe's daily paid circulation fell 8.5 percent to about 397,000 copies for the six-month period that ended March 31, compared with the same period in 2005, according to data published by the Audit Bureau of Circulations.
Some analysts tout private ownership as a good way for newspapers to make bold strategy changes without fearing that investors will beat them up over disappointing profits.
But not all privately held newspapers are facing good times. The Philadelphia Inquirer and Philadelphia Daily News are facing layoffs after being sold by McClatchy Co. (MNI), which in turn bought them along with Knight Ridder Inc.