The Times of Beacon Hill, Anyone?

Months before The Boston Globe dedicated its lead news story on April 4 to the New York Times Company’s threat to close the Boston broadsheet, The Globe’s future was discussed in the New York Times Building on Eighth Avenue.

Presumably, more than once, in the office of Times Company CEO Janet Robinson. But at least once in a meeting with the entire Times newsroom.

In October, at a newsroom-wide state-of-the-paper meeting, a staffer asked executive editor Bill Keller, apropos looming budget-slashing maneuvers, if The Times had considered integrating some departments with The Globe; after all, the paper had just announced efficiencies between The Times and its dependency, The International Herald Tribune, to trim down duplicate desks and share content between the international paper and

The Globe is really a separate arm of the company,” said Mr. Keller. “They’re going through hard times, even harder times than we are. I love The Globe and I’m friends with [Globe editor] Marty Baron and I wish them well, but no, there’s no consideration being given to integrating with them.

“It’s not entirely clear what we would gain from that,” he continued, “unless you were talking about some day where there’s no longer a Globe, and The New York Times wants to conquer a very elite market around Boston.”

Perhaps he knew something, or perhaps it was nothing more than a bit of “blue-sky” thinking of the type that editors in chief are having to entertain everywhere these days. Suddenly, though, the prospect is looking less alien.

“Times Co. threatens to shut Globe, seeks $20m in cuts from unions” read the banner headline in The Globe on Saturday morning.

The Globe—and later, The Times, in its own story—reported that at a Thursday meeting, Times Company executives said the union would have to find $20 million in cost savings at The Globe or the newspaper would face closure.

The news had come trickling into the Globe newsroom on the previous afternoon.

“At lunch, I was with an executive who had some knowledge, and there was an email sent to members of my union, which said everyone was going to keep what happened on Thursday confidential,” said Alex Beam, a columnist for The Globe.

Ninety minutes later, those efforts had demonstrably failed.

“The office was literally, literally trembling,” he said. “It’s dispiriting as heck. I was really saddened and astonished to see how much money The Boston Globe is losing and I’m partly amazed we’ve been allowed to operate in that environment for as long as we have.”

But what’s now becoming evident to staffers—that the paper loses a tremendous amount of money—is something Times Company executives have known for some time. If the Times Company has bent over backward to protect the 1,300-person newsroom of The Times—rather than cutting, The Times is hoping its newsroom will take a 5 percent salary cut, which editors started taking last week—the same treatment hasn’t been applied to The Globe. They’ve gone through five rounds of staff cuts since 2001, the most recent one completed earlier this year.

Admittedly, the paper is struggling. But Mr. Beam said that despite the immense losses, there is some insurrectionary feeling at 135 Morrissey Boulevard in Boston toward the paper’s Timesian overlords.

“I don’t go for this whole ‘The Times fucked us up’ line,” he said. “It’s nonsensical. I saw someone quoted anonymously in the Boston Herald and that’s pretty fucking bold. It’s something you could hear, but it’s not a majority.”

Just how much is The Globe losing The Times? Executives told union leaders that the paper lost $50 million last year, and would lose $85 million this year.

But why did the Times Company threaten The Globe with a shutdown? It’s something we’ve seen a bit of recently: The Newhouses did it with The Star-Ledger in Newark; the Hearst corporation with the San Francisco Chronicle.

For a company as big as this, $20 million doesn’t seem like a make-or-break sort of cut, especially when the paper is supposedly losing so much more.

And, as Mr. Keller said, Boston is an elite market. The New England Media Group, with The Globe representing the biggest breadwinner, brought in $523 million in revenue last year—not exactly chump change. Can an organization with $523 million in revenue really be on its last limbs over $20 million?

“At this point, it’s primarily a negotiating strategy,” said John Morton, the newspaper analyst. “The likelihood that The Times would shut down The Globe is pretty remote, but it does suggest that no company is required to lose $50 million a year.”

This is the Sulzberger-Ochs family, we’ve been told more than once: They build newspapers, they don’t dismantle them.

So what is the real breaking point for The Boston Globe?

“It’s really the trend,” said Ed Atorino, the analyst from Benchmark Company who specializes in media. “The single number is not the key. If you’re losing $85 million and you thought next year it’s $40 million, you would ride it out. But if you’re losing $85 million and you think the next year it’s going to $100 million, and you think there’s no stopping it, you can’t let this continue.”

What is important is to make the unions see what happens to their organization if the targets aren’t met. Mr. Atorino believes the fate the Times Co. is trying to avoid is one that other newspaper companies are meeting left and right: bankruptcy.

“As the banks see deterioration in cash flow, that means The Times is approaching a limit, or a trigger point, at which the banks can force an action to get them into Chapter 11,” he said. “Increasing losses at The Globe is reducing The Times’ cash flow and driving them possibly toward their bank agreement limit, which could lead to Chapter 11. Then if that happens, the banks can force them to sell stuff, and a lot, a lot of nasty stuff can happen.”

Twenty million in savings won’t simply make The Times feel better—literally every dollar at this point counts. And if you don’t get it, you basically have no other choice other than to make that threat.

If the paper could be sold, it would be. But who would actually buy it at this point? In late 2008, Barclays valued The Globe at $20 million.

“I doubt there’s actually a market for it,” said Mr. Morton, the analyst.

There are other reasons, too. Last year, at a Bear Stearns media conference, Janet Robinson was asked the question directly.

“Anybody evaluating a divestiture needs to keep in mind the market for newspapers as well as the low tax base of our assets like The Globe,” she said.

At that same conference, Times CFO Jim Follo said what seems abundantly, painfully clear to the hundreds left in the Globe newsroom. “We are not married to any one asset other than probably the New York Times newspaper,” he said.

That is, everything else but The Times itself gets scuttled first. Suddenly the Times Co. “conquering” Boston (or having been conquered there?) seems a more real phenomenon.

And why not? Boston readers are accustomed to picking up a Daily News or a Post at the local “spa” (that’s local jargon there!). Why not The Times’ Beacon Hill Edition? And no more Globe?

“It would be a terrible idea,” Mr. Morton said. “I don’t think the Times Company would come to that point except if the viability of The Times was under threat, and I think they’re a long way away from that.”

We’ll see …

  The Times of Beacon Hill, Anyone?