BOSTON Former General Electric CEO Jack Welch and soon-to-retire Hill, Holliday, Connors, Cosmopulos chairman Jack Connors are part of a group that could make an offer to acquire The Boston Globe from The New York Times Co., according to sources, echoing a report in today's issue of the Globe.
According to published reports, the pair has teamed with JPMorgan Chase & Co. and other investors for a proposed deal estimated at approximately half the $1.1 billion the Times paid for New England's largest daily newspaper in 1993.
A Times representative declined comment. Connors issued this statement: "I've been an avid reader of the Globe my entire life and I appreciate the important role the newspaper plays in the civic life of this community. But the current speculation is very premature. I have conversations about possible business deals all the time and 90 percent of them never move forward."
The Times last week said its earnings fell nearly 40 percent during the third quarter to $14 million compared to $23 million a year ago. Revenue for the period slumped more than 2 percent to $740 million.
Revenue at New England Media Group, which includes the Globe and The Worcester Telegram & Gazette, dropped 9 percent in the third quarter. Advertising revenue for N.E. Media Group is down 10 percent for the year through September, the company said.
Like many metropolitan dailies facing increased competition from the Internet and other news outlets, Globe circulation numbers have also slumped, with weekly and Sunday figures dipping 37,000 (to 400,000) and 70,000 (to 675,000) respectively during Q3, compared to the same period a year ago.
Last week, Globe members of the Boston Newspaper Guild voted down a proposed four-year contract that would have linked pay increases to company revenue, but excluded revenue of Boston.com, the Globe's online operation.
Hill, Holliday handles the newspaper's advertising account. Recent ads for the paper have touted its print and online employment section.
"There are many examples of people and entities (such as VC and LBO specialists) that think that de-coupling an entity from the mothership will create more focus, value and opportunity," said Chris Colbert, managing partner at Boston-based communications consultancy Pile and Co. "The combination of Welch and Connors brings impressive leadership to the task, and the latter [has a] visceral understanding of the Boston market. But I'm not sure that's enough to take on a category that is undergoing such a massive sea change. The best and the brightest minds in the industry haven't figured it out."
Connors co-founded Hill, Holliday in 1968 and sold the company in 1998 to Interpublic Group in a deal valued in excess of $75 million. He is stepping down as chairman by year's end [Adweek Online, Nov. 19].
After a growth surge in the late 1990s, agency billings leveled off in recent years and hover around $1 billion. Estimated revenue improved 3 percent last year to approximately $150 million. Top clients include Dunkin' Donuts, CVS and Liberty Mutual.
Hill, Holliday made a big score a month ago, adding a national branding assignment from longtime client AOL, which spends some $300 million annually on ads.
Connors is a legendary figure in local business circles, known for building exceptionally strong and long-lasting client relationships, and for making Hill, Holliday one of the most progressive regional employers, offering benefits such as on-site daycare and liberal personal-leave policies. He also serves as chairman of Partners HealthCare.