NY state of mind
The New York Times Company scoops up the Worcester Telegram &
Gazette and protects its investment in the Boston Globe. But will the
T&G become a better paper under Times ownership?
by Dan Kennedy
Bill Kovach says the key to understanding the New York Times
Company's purchase of the Worcester Telegram & Gazette last week
lies in suburban Atlanta, of all places. It was there that the Sulzberger
family, the principal owners of the Times Company, learned a vital lesson in
protecting the bottom line: don't get into a war with an aggressive,
Kovach is the curator of Harvard's Nieman Foundation, but 10 years ago he was
the editor of the Atlanta Journal-Constitution. A former
Washington-bureau chief for the New York Times, Kovach was presiding
over a renaissance in Atlanta newspapering. His peskiest rival was the
Gwinnett Daily News, which served Atlanta's affluent, rapidly growing
northern suburbs, and which had been acquired by the Times Company in 1987.
The Cox chain, owner of the Journal-Constitution, launched an all-out
blitz to win the war of Gwinnett County. It started a special Gwinnett County
edition. It cut the newsstand price and slashed advertising rates. The measures
worked. In 1992, the Sulzbergers waved the white flag, shut down the Daily
News, and sold the remaining assets to Cox.
Zip ahead to October 14, 1999, when the Times Company announced -- after
several weeks of speculation -- that it would purchase the Worcester
Telegram & Gazette for $295 million. By itself, the move was
certainly not unimportant: the T&G is the third-largest daily
newspaper in Massachusetts, and it has an ironclad monopoly in the state's
second-largest city. Far more important, though, is that the Sulzbergers have
insured themselves against the possibility that a newly awakened T&G
will begin battling the Times Company's Boston Globe in the western
suburbs and exurbs.
"I guess once you buy the Globe for $1 billion [actually a
reported $1.1 billion, in 1993], you have to protect your investment,
because their goal is to dominate the Northeast," Kovach says of the Times
Company. "If a strong, tough competitor took that newspaper [the
T&G], it could serve as a roadblock against that regional dominance.
So you remove that competitive challenge."
Which underscores the most important element of the T&G's sale:
this is a business story far more than it is a journalism story.
Until the paper was sold for the first time, in 1986, it was owned by the
old-line, conservative Stoddard family (long-time publisher Robert Stoddard was
an enthusiastic member of the ultra-right John Birch Society), a clan
accustomed to having its way in the community. Bob Stoddard died in 1984; the
T&G was acquired two years later by Chronicle Publishing, owner of
the San Francisco Chronicle, for nearly $200 million. The
T&G then followed a well-trod path for chain newspapers: it
downsized, not just merging the morning Telegram and the Evening
Gazette, but shrinking the news hole and eliminating reporting positions as
well. "They bought us in the middle of the Massachusetts Miracle, and the
Miracle died two years later," observes T&G State House reporter
Brian McNiff. Though today's T&G may be a more professional product
than its family-owned predecessor, it is also thinner, blander, more generic.
T&G staffers contacted by the Phoenix say they are pleased
that their paper went to the Times Company rather than to one of such
profit-obsessed chains as the Journal Register Company or MediaNews Group,
which reportedly made strong bids, or to Fidelity's Community Newspaper Company
(CNC), which has not won kudos -- to put it mildly -- for the way it has
managed its flagship, the MetroWest Daily News.
"My reaction is favorable," says political reporter Tim Connolly. "The
reaction of everybody I know at the paper is sort of relieved that it finally
came through, and that it was the New York Times and not one of the
other companies." He adds, laughing, that "people I run into on the street say,
'You finally made it to the New York Times.' And my reaction is that
this is the only way a hack like me could ever wind up with the New York
Times unless I go out to buy a paper."
But those who think the Times Company is going to rush in and start publishing
Worcester County's version of All the News That's Fit To Print are expecting
more than the Sulzbergers are likely to deliver. The T&G's own
coverage of the sale emphasized the paper's eye-catching 30 percent
cash-flow margin. You can be sure that Times Company president and CEO Russell
Lewis will not be calling up T&G publisher Bruce Bennett (assuming
he survives the transition) and ordering him to hire more reporters and lower
Students of the Sulzbergers say they try to strike a balance with their
smaller regional papers (the T&G will be the 22nd acquired by the
Times Company), insisting on higher profit margins than the New York
Times itself earns, but not turning the screws so tightly that good
journalism becomes impossible. The Times Company's most recent annual report
reflects those priorities perfectly: at the Times, the pre-tax profit
margin is in the low 20s; at the Globe, it's in the mid 20s; and at its
regional papers, it's in the high 20s. But even though the smaller papers could
clearly spend more on news coverage if the Sulzbergers didn't insist on such
high profits, Times Company ownership is still relatively benign -- especially
when compared with chains such as Gannett, which has been known to demand
margins in excess of 40 percent.
Indeed, in the new biography of the Sulzbergers, The Trust (Little,
Brown), wife-and-husband co-authors Susan Tifft and Alex Jones reveal that
Lance Primis lost his job as Times Company president in 1996 in part because
several of the regional publishers complained to the Sulzbergers about Primis's
heavy-handed efforts to cut costs and drive up profits. "The Times has a
different standard for its flagship than for its other newspapers, but it's not
a draconically different standard," Jones said in a Phoenix interview.
"The Sulzbergers don't want to have a newspaper owned by the New York
Times that makes them feel embarrassed to come into town. They want it to
be a paper that they can be proud of. But that's not to say that they operate
it with the same obsessive care and open pocketbook as the New York
In the hierarchy of the $2.9 billion New York Times Company, there is the
Times and there is the Globe, and then there is everyone else.
The Times and the Globe both operate as separate divisions. The
21 regional papers, clustered mainly in Florida, Louisiana, the Carolinas, and
California, constitute a third division. For the six-month period ending on
June 27, the Times' revenues were a reported $864 million, and the
Globe's $295 million; the 21 regionals' total revenues were
$225 million. (The company owns several television stations and magazines
Though it's not yet clear exactly where the Telegram & Gazette will
fit into the corporate hierarchy, it's a safe bet that it will be stuck in the
"everyone else" category, except that it will share some expenses and business
functions with the Globe. Indeed, in a statement issued to announce the
sale, the Times Company's Lewis talked about pursuing a "clustering" strategy
in which the Globe and the T&G will cooperate on printing,
purchasing, circulation, and various back-office functions.
"There will be some opportunities, obviously, for cost-saving," says media
analyst John Morton, president of Morton Research, based in Silver Spring,
Maryland. "When there are newspapers in fair proximity, you can often combine
some of the administrative functions. And, of course, the Times Company, being
much larger than Chronicle Publishing, gets better prices on everything from
paper clips to newsprint." Overall, Morton is bullish on the deal, saying, "I
think it will increase the Telegram's competitiveness. The Times
has deep pockets and doesn't mind spending money."
The lifeblood of any newspaper is advertising, and it is here that a
relationship with the Globe could make a real difference, not just to
the T&G's profitability, but to the Globe's and the Times
Company's as well. "The company's ownership of the Boston Globe and the
Telegram & Gazette will enable us to better serve readers and
advertisers in the eastern half of Massachusetts," Lewis said in his statement.
"While the papers serve two very different markets, we see good revenue
opportunities and clustering efficiencies."
Translation: the Times Company is going to make it possible for advertisers to
buy space in the Globe and the T&G at one rate. The two
papers sell a combined 571,000 copies on weekdays and 872,000 on Sundays. It
gives the Times Company a huge competitive advantage, and you can be sure that
other newspaper companies are worried about the impact -- perhaps none more
than Fidelity, which, after all, had wanted to add the T&G to its
own roster of 100-plus community papers. Kirk Davis, president of Fidelity's
CNC subsidiary, admitted in an interview with the Boston Herald that the
Times Company's move was "inconvenient," adding: "We can only focus our
organization on competing, and we're great competitors." Then, too, the
combined advertising strategy isn't exactly good news for the Herald,
New England's largest independently owned daily. After trying and failing to
purchase the Brockton Enterprise, the Lowell Sun, and the Quincy
Patriot-Ledger in recent years, Herald publisher Pat Purcell
finds himself losing circulation and being hemmed in by competitors.
But the threat posed to CNC and other newspapers by any sort of
Globe-T&G advertising alliance shouldn't be exaggerated.
Business commentator John Ellis, a former Globe columnist, says CNC
won't be hurt because its papers have more of what surveys show readers want
most: local news. And Sally Stitt, president of Star Media, an advertising
agency in Natick, says media buyers won't change their advertising strategy
because the T&G circulates mainly in Worcester County, whereas CNC
is concentrated in Greater Boston, MetroWest, and Cape Cod.
The potential collaboration that everyone wonders about, but that no one in a
position of authority will discuss, is on the editorial end. Some speculate
that the Times Company will intervene to make the T&G's conservative
editorial pages more closely reflect the views of the liberal Times and
Globe. Others suggest a more direct collaboration: the company could cut
costs by having the T&G share (to cite three possible examples) the
Globe's State House, regional news, and sports coverage.
It's a disconcerting prospect. Though the T&G's coverage is often
undistinguished, dumping it in favor of Globe stories would turn the
paper into just another edition of the Globe and rob the T&G
of its identity.
"I think it's pretty important for an area of this size to have its own daily
newspaper that has its own editorial independence and publishing independence,"
says former Worcester mayor Jordan Levy, CEO of Parker Affiliated Companies and
a talk-show host on WTAG Radio. "I guess they can run the business office, but
I just hope they leave the nuts and bolts of the newspaper alone."
Will that happen? The likely truth is that no one yet knows. Lewis's statement
offered not a hint. T&G publisher Bennett could not be reached for
comment; in a prepared statement, he said, "At this early time, more is still
unknown than is known." Times Company spokeswoman Nancy Nielsen has said that
details of how the merger will be carried out will not be announced until the
sale is complete, a process that could take several months.
There are, though, some signs, and they are mostly favorable. For one thing,
the Times Company's other regional papers operate more or less independently,
and are not forced to share coverage. For another, the company has yet to lay a
finger on the Globe's editorial operations, more than six years after
But that could change. After all, the company's five-year agreement not to
mess with the Globe's internal operations expired only last October --
and this past July company chairman Arthur Sulzberger Jr. replaced Globe
publisher Ben Taylor, a descendant of the paper's founding family, with Richard
Gilman, a veteran Times executive. Then, too, Gilman, in an interview
with the Phoenix, pointedly refused to rule out the possibility that the
Globe and the Times would share coverage at some undetermined
point in the future (see "Don't Quote Me," News and Features, July 16).
New Yorker staff writer Ken Auletta, who has covered the Sulzbergers
and the Times for years, says he "would have said no" if he'd been asked
before Taylor's abrupt dismissal whether the company would impose any sort of
cost-sharing on the editorial side. Now he's not so sure. "The Times, to their
credit, is a company that cares about newspapers and the news hole and all
those good things that they like to extol," Auletta says. "And they're
gentlemen. But in this case they were not gentlemen in the traditional way."
In the end, the Times Company will probably not force shared coverage on the
T&G or, for that matter, on the Globe -- not out of any sense
of journalistic noblesse oblige but, rather, because it would be bad for
business, demoralizing the staffs and pissing off the papers' most affluent,
The story of the T&G's transition from independent newspaper to part
of a small newspaper company to, now, a cog in a large media conglomerate is
the story of the declining influence of hometown publishers. But it is also the
story of once-isolated Worcester, now a high-tech and medical center, opening
up to the world.
Frank Connolly, a political consultant with Boston's Kiley & Company, got
to know Worcester when he was a writer for Worcester Magazine in the
1980s. He recalls that, in those days, Robert Stoddard and his family owned not
only the city's two daily papers, but a radio station and Wyman-Gordon, a major
defense contractor, as well. "It's hard to imagine now the power that that
paper, and through that paper Bob Stoddard, exercised in the city of
Worcester," says Connolly. "It was just extraordinary."
Although that kind of influence is long gone, the T&G under
Chronicle Publishing ownership has remained largely under the control of the
city's old elite. Publisher Bruce Bennett and editor Harry Whitin are both
long-time, well-connected T&G employees, and San Francisco bean
counters let them run things the way they liked -- as long as they hit their
numbers. Jake Powers, a professor of urban studies at Worcester State College,
describes the T&G as "essentially a Republican newspaper in a
Democratic city, a white-Anglo-Saxon-Protestant newspaper in an ethnically
diverse city, a management newspaper in a labor, blue-collar city." Powers is
hoping that will now change.
Kathleen Shaw, the religion/police/general-assignment reporter who heads the
T&G's six-year-old union, was in the newsroom the night of Sunday,
October 10, when she received unofficial word that the sale to the Times
Company had, at long last, been finalized. "I got up and I just kind of walked
around the room and told a few people," Shaw says. "I remember a copy editor
getting up and telling me, 'I want to tell you I'm as responsible as anyone for
the paper being sold to the New York Times.' " Shaw expressed
puzzlement, and the copy editor explained, "Because I was wishing so hard."
Be careful what you wish for. The Times Company's focus is going to be firmly
fixed on the balance sheet, just as it was under Chronicle Publishing
ownership. Those who work at -- and read -- the Telegram & Gazette
are going to learn that their paper now has a dual purpose: to serve the
community, yes, but also to subsidize the Times by running up high
profits for the benefit of the Mother Ship.
The T&G will not get any worse under Times Company ownership, which
is no small thing in the current media environment. But there is little reason
to believe that the wishes of those who hope for significant improvements will
Dan Kennedy can be reached at email@example.com.
Articles from July 24, 1997 & before can be accessed here