Boston Globe avoids shutdown – at least for now

The Boston Globe will survive for at least another day, but the economic problems dogging New England's storied newspaper are reflective of an entire industry in the midst of a historic, wrenching transformation.

The Globe, which is owned by The New York Times Co., is reportedly on track to lose $85 million this year. That's almost a third of its operating costs. The owners, which had threatened to file a formal notice of intention to shut the paper down in 60 days, said Monday morning that they will defer that filing because they reached agreements with six of the Globe's seven unions.

Media analysts are watching closely how the Globe and the Times deal with the paper's daunting losses. Some hope the decisions could produce a prototype that other struggling big-city newspapers could model to survive the current recession, during which advertising revenues have plummeted and both readers and advertisers have flocked to Internet.

Boston Globe spokesman Robert Powers said the Globe is "very pleased" with the progress made so far, even though it's "disappointed" not to have reached agreement with its largest union, the Boston Newspaper Guild.

"Because of that, we are evaluating our alternatives under both the Guild contract and applicable law to achieve as quickly as possible the workplace flexibility and remaining cost savings we need to help put The Globe on a sound financial footing," he said in a statement issued late Monday morning.

There has been some speculation that the Times is attempting to cut costs at the Globe to sell the Boston paper, which it bought in 1993 for $1.1 billion. Sources have told The Christian Science Monitor that the Times is negotiating with at least one group of investors, although under very strict guidelines, including that any talks be kept strictly private. New York Times Co. spokeswoman Catherine Mathis said in an e-mail: "It is our longstanding policy not to comment on rumors concerning potential acquisitions or divestitures."

The New York Times Co. had originally set a May 1 deadline for the Globe's unions to agree to $20 million in cuts, half of which are to come from the Guild. It extended the deadline through the weekend before negotiations reached an impasse Monday morning. Talks are expected to continue, although specific times have not been disclosed.

At issue have been salary cuts, as well as an end to lifetime job guarantees and other benefit protections.

"It does reflect the sudden changes in the business: Just the concept of lifetime job guarantees obviously seems outlandish today," says Matt Storin, a former editor of The Boston Globe who now teaches journalism at the University of Notre Dame in Indiana.

The Boston Globe is what's known as a full-service newspaper, with bureaus around the United States and the world producing news tailored to Boston and New England readers. Mr. Storin says "it's obvious" that doesn't work anymore because of the expense of that type of reporting.

"It's vital the Globe survives, but it's going to have to survive as a niche publication, the niche being authoritative and investigative journalism within those confines of Boston and New England," he says. "Ironically, it's sort of what the Globe was ... in the mid 1960s when [former editor] Tom Winship took over the paper and remade it."

But some Boston readers would like the Globe to remain as it is, even if it costs them more.

"If this city loses its newspaper of record, it will be very destructive," says Todd Lee, an architect who has subscribed to the Globe since 1977. "We all, the citizenry, benefit from having a forum that's not tailored to special interests, but to general readership."

Mr. Lee says he would be willing to pay more for his subscription if it would help keep the Globe afloat.

Another longtime Globe subscriber, Marie Crocetti, says she is "heartbroken" at the prospect of losing the paper. "I've been reading it for 60 years," she says. "I can't imagine not having it."

Although Mrs. Crocetti also reads the online versions of The Washington Post and The New York Times, she says, "[Reading online] is such a different experience. You look for something specific. You're not going to spend an hour reading it or have your coffee with it."

But many Boston readers are like Matt Bailey. He's a chef who reads the Globe online for world news, but he gets most of his local news from free alternative newsweeklies and the free Boston edition of the Metro newspaper, which is distributed on the subway. "It's almost like, why would you pay for a paper?" he asks.

Still, he says, it's hard to imagine the Globe disappearing: "It's an icon. It's a little strange to think it might not exist."

On break from his job as a barista in Boston, Andrew Smith is ambivalent about the potential loss of the Globe. He doesn't read it regularly, although the Starbucks where he works carries it and he glances at the headlines most days.

"I can't really say," he says. "My knee-jerk reaction is to say it wouldn't [affect me], but I think it would. I'd be sad." Mr. Smith grew up in the Boston suburbs and went to college at the University of Massachusetts, Boston, near the Globe's headquarters.

The current financial struggles are also difficult for many former employees to watch – particularly those still feel pride in the national reputation the Globe built as a journalistic powerhouse, known for its investigative journalism and worldwide bureaus.

"It's sad and stunning to see the peril it's in today," says Mark Jurkowitz, a former ombudsman for the Globe who is now associate director of the Project for Excellence in Journalism, a think tank in Washington.

For decades, newspapers were able to subsidize high-quality, in-depth journalism even as they covered daily events around the city and the world. But such journalism is expensive, and a key question for the industry to figure out is who will subsidize that reporting, Mr. Jurkowitz says.

"The real problem in journalism today is not an audience problem; it's a revenue problem," he says. "If you combine the total eyeballs that are either reading the daily papers or reading them online, these papers have more readers than they've ever had before. People are still interested in the news. The question is, how do we get advertisers or news aggregators [like Google] or the general public to pay for it?"

Even the most optimistic observers say it could take five to 10 years for the media industry to adapt to the drastically changing economic landscape.

"We have to look at the vulnerability of The Boston Globe within the context of many other weaknesses in American culture and American life right now," says Roy Clark, a senior scholar at the Poynter Institute, a nonprofit journalism foundation based in St. Petersburg, Fla. "We now have to build a bridge of survivability so we can eventually revive and thrive. But it won't come easy: It requires a lot of work, a lot of ingenuity, a lot of sacrifice and entrepreneurial cleverness, and lots of experiments, some of which may not pan out."