Red Sox Owner to Purchase Boston Globe

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Aug. 5 (Bloomberg) -- Billionaire sports team owner and financier John Henry, who helped the Boston Red Sox capture the World Series in 2004 and 2007 after an 86-year drought, will attempt another comeback with Boston’s hometown newspaper. "Newsonomics" Author Ken Doctor and Bloomberg's Edmund Lee speak with Alix Steel on Bloomberg Television's "Market Makers." (Source: Bloomberg)

Why would john henry won this?

A hometown paper, he is a home town hero in a way.

The thing is that newspapers tend to attract entrepreneurs with a certain ego, a certain sensitivity around saving in the hometown paper.

"the boston globe" definitely needs it.

Can you see this as anything other than a vanity purchase from a hometown guy?

There is certainly vanity involved, but you can make the financial case that he is buying at this case at the bottom or close enough to the bottom, for people who are in love with distressed assets, this is terribly distressed asset and it may be close to the bottom.

What does he need to do in your opinion to earn a decent return on the money invested in the globe?

Is that possible, even?

It is, but it is at least a three-year to five-year kind of process.

He has gotten into the business big time over the last few months.

He has said that, that profits are coming in to these papers and they will decline over the next three years to five years.

The most difficult part of this transformation that has been going on for 15 years lies in turning these companies mainly from print to digital.

With some investment, patients, and smart management, he could wind up with an asset that is much more valuable than the 70 million he is paying for it.

Looking at these newspapers, loggers, reporters, we're really is the growth?

Digital is where the growth is.

Warren buffett has been purchasing community newspapers with circulation as small as 30,000 or 40,000, but "the boston globe," that has different concerns.

The sooner that all of these newspapers head in a particular direction, the better off they will be.

It is a matter of maintaining costs on those websites and tablets.

Where was warren buffett?

Just $10 million, or do we know if he was swirling around at all?

Yeah , he showed no interest in this.

He may be interested in the wooster paper, it is a far less competitive market.

He does not like competitive markets, does not like competitive newspapers.

The metro papers are in a class by themselves and in the u.s. they have been everything to everyone.

Many of them are reorienting to become local papers.

That is what they need to do because many of us get our national news from bloomberg, "the new york times," "the washington journal," etc.. a change from the globe to a really good regional player is a tough one and they are midway through that process.

I think they will be farther through the process with the ownership of john henry.

With more on just how hard it is, when the times put the glove up for sale they were hoping for more bids with his love of newspapers being well-known.

No interest whatsoever.

I guess my question is, though, what does it mean when big-name investors buy something like this and have no experience in the industry?

A good question.

It does require patients.

This will be three, five, maybe more years in terms of having a turnaround.

Is he willing to lose money as the manages costs?

It is a good question.

He has on other enterprises, not newspapers.

Is there synergy between the globe and the red sox?

I think it is the sports network.

The red sox are very popular, but look at sports as a franchise in boston.

The red sox and beyond.

When you have a new england sports network and the megaphone and you think about the kinds of products, commerce, tickets that you can sell through nesn, you will see a lot more.

In california comcast, which is similar, uses the daily newspaper reporters and columnists on the air all the time, but i do not think that is the case in boston today.

I think we will see synergy in terms of promotion in the ability of, a little known asset here in this sale, to really become a commercial, digital center in boston and i think of john henry is smart, he will continue on that path.

"the boston globe" has started but is not there yet.

Based on the track record they have so far, is it a good thing for billionaires to own newspapers?

How does it feel to the public in boston have this billionaire?

I think it is a positive feeling that someone once said.

But we should note is that a bunch of the sports reporters on a "the boston globe" expressed concern over the weekend that because they cover the red sox, it is important to the community there, but they cover it with independents.

When the sox are not doing well, they say saudi.

I think they are expressing concern about whether or not they can cover it with have been.

Can they?

What's the proper concern.

The billionaire question cuts both budget cuts both ways.

You need a patient billionaire who can give profits out of this and it is better to take your profits over the next few years and invest.

That is what aaron kushner five years ago tried to do in orange county.

That is the model to watch, how do you smartly invest in the newspaper and the asset?

Good conversation, we will have to watch it as it plays

This text has been automatically generated. It may not be 100% accurate.


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