Boston Globe to be sold to the New York Times $1.1 billion deal biggest ever for U.S. paper

June 11, 1993|By New York Times News Service Newsday and the Los Angeles Times contributed to this article.

NEW YORK -- The Boston Globe, one of the few large U.S. newspapers that remain under family control, would be sold to the New York Times Co. under a $1.1 billion merger agreement approved yesterday by the boards of both companies.

The deal provides that the Globe would retain its management and editorial autonomy. Yet it adds to the decades-long centralization of U.S. communications, under which many independently owned news organizations have been sold or closed down. It would also considerably expand the role of the Times Co. and its controlling family, the Sulzbergers, in the country's media.

The purchase price, to be paid largely in stock of the New York Times Co., would be the highest ever for a U.S. newspaper, securities analysts said this week as rumors of the proposed deal spread in Boston and on Wall Street.

The Taylor family has run the Globe since 1873. Two family trusts that control the Globe's parent company, Affiliated Publications Inc., expire in 1996, and it had long been expected that the company would sell before then to avoid the danger of a hostile takeover or a battle among the heirs.

The merger would bring the largest newspaper in New England into the Times Co. It would extend the New York company's reach in a broad corridor from Maine to Washington, giving it a huge advertising market in New England.

Arthur Ochs Sulzberger, the chairman of the New York Times Co., called the deal "an extraordinary opportunity that we could not let pass." Ownership of the Globe, he said, will help the company as a supplier of information and a conduit for advertising.

Under the agreement, the Globe's current management is to remain in place for at least five years.

The Globe, which has prized its independence for more than a century, will also retain what the companies' statement called "full editorial autonomy," though the details of the agreement were not released yesterday.

William O. Taylor, the fourth generation of the Taylor family to be publisher of the Globe, said, "There will be no editorial policy changes at the Globe resulting from this alliance."

But at an afternoon meeting of his senior news staff yesterday, Globe Editor Mathew Storin said that nothing at the paper would change "for the foreseeable future." The foreseeable future, as defined in the sale, is believed to be three to five years, various reporters and editors were told.

The mood at the Globe yesterday was resigned but calm in reaction to the news, which had been rumored for days, though it was not certain until the Affiliated board met and approved the offer yesterday afternoon.

'Independent is better'

"Being owned by the New York Times is about as good as you can do," City Editor Walter Robinson said, "but being independent is a lot better, and we have lost that."

The Globe, with a weekday circulation of 504,869 and Sunday circulation of 811,409, is by far the largest newspaper in New England and is one of the 15 largest newspapers in the United States.

The New York Times is the largest metropolitan and Sunday newspaper in the United States, with daily circulation of 1,230,461 and Sunday circulation of 1,812,458.

If the sale of the Boston newspaper is completed, it will mark the end of one of the most complex -- and private -- corporate stories in recent years.

Since 1873, two families have controlled the Boston newspaper. The heirs of Eben D. Jordan, the founder of the Jordan Marsh stores, who was one of the original investors, shared the ownership with the heirs of Charles Henry Taylor, Mr. Jordan's business manager.

Shaped Boston's identity

The sale would also mean the end of the independence of a newspaper -- usually self-consciously responsible, sometimes flamboyantly liberal -- that has helped shape the identity of Boston and played a part in the life of the nation.

"The Globe is a critical element of Boston life," said Rep. Joseph P. Kennedy II, the latest Massachusetts politician in the famous family that the Globe has occasionally battled and, some say, too often championed.

Through the generations, and especially since big media companies began to gobble smaller newspapers in the 1970s and 1980s, the Globe has prized its independence as a business.

Its image as a newspaper that answered to no one was central to its view of itself. And there were some who said that that was what propelled it to become the dominant newspaper in New England.

"We have been willing to take risks editorially, and we've been able to paddle our own canoe," the newspaper's current publisher and chairman, William O. Taylor, told a Globe historian in 1981. Mr. Taylor, 60, took over from his father as publisher in 1978.

Affiliated stock exchange

Under the agreement approved at separate board meetings in Boston and New York yesterday, the Times Co. would exchange all of Affiliated's stock for New York Times class A common shares. Affiliated shareholders would have the option of receiving cash for up to 15 percent of their Affiliated shares.

The companies valued the offer at $15 a share for each share of Affiliated. Shares of the Globe's parent company, Affiliated Publications Inc., declined 25 cents each yesterday, to $13.25, on the New York Stock Exchange.

The New York Times Co.'s class A stock fell 62.5 cents a share, to $26.875, on the American Stock Exchange.

The deal remains subject to approval by shareholders of both publicly traded companies.

In addition to the New York Times, the Times Co., with $1.8 billion in annual revenues, owns 31 regional newspapers, 20 magazines, five television and radio stations, and other businesses.

In addition to the Globe newspaper, Affiliated owns 33 percent of BPI Communications, a publishing company that owns 19 magazines including Adweek, Billboard and The Hollywood Reporter.

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