Second, when times were flush with cheap credit, the NY Times and many other newspaper companies racked up enormous sums of debt on their balance sheets. I was brought into the negotiations for the Seattle PI before it went under and there were literally hundreds of millions of dollars of debt on their balance sheets, and only 123,000 subscribers. When The Globe sold for over $1,000,000,000, its days were numbered because the business could never support that kind of valuation.
Third, as the subscription numbers of plummeted, The Globe did the unthinkable. In order to keep revenues the same, they kept raising and raising their advertising rates. This is almost as insane as well, raising the price of your product as more and more people shun it, they did that too. Now, in Gloucester, The Globe costs a dollar and that is rumored to be going up to $1.50 per copy on May 1. That’s insanity.
Fourth, the world has changed. In fact, it has been changing for the last fifteen years. It’s been almost that long since I got out of traditional advertising and into new media. Over the course of that period of time, newspapers like The Globe fought and fought and fought against the new media world. They disparaged bloggers and sites like this one. They said that new media and citizen journalism was a joke or worse. They continued to pay people who write weekly columns hundreds of thousands of dollars a year as the world changed around them.
Now, the inevitable happened. Instead of adapting when they could, they are being forced to radically shift their model. I doubt very much that they will succeed.
Can Boston.com support 1,400 employees? Of course not. But can it provide coverage here in Boston and support a small group of reasonably paid reporters? Absolutely.
Is there a human cost of The Globe closing? Of course, and I am not diminishing the impact it will have on many, many hard-working good people. But, let’s be clear, The Globe’s wounds are self-inflicted. For over a decade, they refused to adapt. For over a decade, they refused to work with advertisers and price their advertising fairly. For over a decade, they stayed true to old ideals, old wisdom and old thinking.
Now, they will be closed.
Have no doubt, The NY Times is in serious trouble, you don’t do loan-shark loans at 14% unless you are really in need of cash. They will not hesitate to close to save their own skin.
Let the end come quick. Let’s help everyone who loses their jobs find new ones.
But don’t cry for The Globe. They thought they were all-powerful and would live forever. They’re dead wrong.
