What’s the Boston Globe Worth, Anyway? Try $120 Million

By Jeff Bercovici

Mixed Media

Image by Getty Images via @daylife

October 28, 2010 – Image by Getty Images via @daylife A group of investors, led by entrepreneur Aaron Kushner, wants to buy the Boston Globe. The New York Times Co. says it’s not for sale , but then that’s what the Bancroft family said when Rupert Murdoch offered them $5 billion for The Wall Street Journal, and look how that turned out.

So let’s play this game. How much would it cost to buy the Globe? And how much is it actually worth?

For some informed speculation, I turned to media appraiser Kevin Kamen, who correctly predicted Newsday’s sale price of $650 million, give or take $25 million. Since the Times Co. doesn’t break out figures for the Globe per se, only for the New England Media Group (which also includes the much smaller Worcester Telegram & Gazette), Kamen could only come up with a very rough estimate based on that group’s 2009 revenues of $440.6 million; its reported 2009 loss of $85 million, since reined in by $10 million of union-approved cost cuts; and its circulation of 264,000 on weekdays, 419,100 on Sundays.

Crunch all those numbers, and what’s the Globe worth? “I would say no more than $120 million,” says Kamen. “And I’m being very generous. I would say it’s worth, realistically, $75 million.” The extra $45 million, he says, is based on the assumption that whoever buys it must have an notion of how to make money from it beyond “Let?s buy this thing and see what happens.” (It’s worth pointing out that that’s exactly the spirit in which Sidney Harman bought Newsweek, but he only paid $1 for it.)

“Whoever’s buying this has got to have an ulterior motive,” says Kamen. “There’s got to be a bigger picture that’s consequential to them.”

Of course, even at $120 million, the Globe is still a relative bargain when you consider that the Times Co. paid $1.1 billion to acquire it in 1993, and that, as recently as 2006, Jack Welch was prepared to pay $550 million or more for it. Just imagine what it’ll be worth in another four years if the Sulzberger family holds out.