by Jason Schwartz | February 18, 2014 9:21 am
Just days after striking a deal to buy the Boston Globe from the New York Times Company last summer, John Henry walked into the paper’s newsroom as the city’s most important private citizen in decades—maybe centuries. He already owned one great Boston institution, the Red Sox, and now, for a mere $70 million, he’d bought a second.
As he made his way around the room to greet reporters and editors, neither party knew quite what to make of the other. “He was standing, hovering over my desk with an outstretched arm. It was really weird,” one reporter recalls. “Like, ‘Hi, I’m John Henry.’ ‘Oh, hello.’”
“You’re shaking a billionaire’s hand,” says another. “There’s an apprehension to it. Okay, what’s going to happen? We know so little about him.”
However awkward the encounters, there was an incredible amount riding on Henry’s venture into the newsroom, and, by extension, the news business. Though the Globe’s journalism continues to be strong—really, irreplaceable—as with newspapers everywhere, its business model is broken. Henry’s purchase included the Times Company’s entire New England Media Group, made up of the Globe, Boston.com, the Worcester Telegram & Gazette (which Henry intends to sell), and sundry other related businesses. The group, rechristened as Boston Globe Media, has been bleeding revenue for years. At the time of Henry’s deal, total 2013 group revenue was projected at $370 million, down from $388 million in 2012, according to the paper’s internal numbers. The Globe operates “somewhere near breakeven,” Henry tells me, “but that’s not a good thing when revenues are declining.” In short, the 142-year-old newspaper needs saving.
“I wanted to be a part of finding the solution for the Globe and newspapers in general,” Henry says. “I feel my mortality. I don’t want to waste any of the time I have left, and I felt this was a cause worth fighting for.”
Since officially taking over in October, Henry, 64, has plunged into his new role: He’s presided over an executive shakeup, rattled his digital team’s cage, given the order to change the subscription model for BostonGlobe.com, and, by all accounts, immersed himself deeply in the details of the paper’s business. He pops into meetings, roams the halls—“There’s a lot to learn, so you might find me anywhere there on any particular day,” he says—and has become known for asking an endless stream of questions. (Henry declined to be interviewed in person, but instead agreed to exchange emails.)
He’s also decided that it’s time for the Globe to make a move. The prospective sale of the paper’s 16-acre Morrissey Boulevard property, he says, “will provide us with the ability to move into a smaller, more efficient and modern facility in the heart of the city. We believe that there is enough excess value there to fund very important investments in our long-term future, if the community supports development of the property.”
To guide him, Henry says that he met with executives and editors from Forbes, the Deseret News, in Salt Lake City, the Times of London, the Guardian, the New York Times, and the L.A. Times, where he spent two days. Katharine Weymouth, the publisher of the Washington Post, traveled to Boston for a meeting.
Henry and his wife, Linda Pizzuti, also shared a three-hour lunch in London with George Brock, the head of the journalism department at City University London. “Don’t ask your people to innovate,” Brock told Henry. “Tell them to experiment. Turn the Globe into a giant laboratory for journalism.” Henry says, “That resonated with me.”
The question is, what will Henry’s experiments be? And in the face of historic challenges, will they be enough to save the Globe?
Sitting in his corner office, Globe editor Brian McGrory says that he hears from Henry regularly. “He sleeps odd hours. It is not unusual for me to get emails at 1, 2, 3 in the morning,” McGrory says. The missives are not about the nitty-gritty of the paper’s daily journalism, which McGrory insists that Henry doesn’t muddle in, but bigger-picture issues: “He’s emailing me about something he saw in the Financial Times and a change of direction they have in terms of going digital-first, or how the Guardian is trying to lure more people in America to subscribe through their investigative reporting.”
Henry describes his relationship with McGrory as “excellent,” and says he intends to keep him on as editor. One Monday after a Patriots game early in Henry’s reign, the new owner walked into McGrory’s office, sat down, and started thumbing through the Sports section. Why, he asked, weren’t there more ads? Soon after, McGrory and his fellow editors launched a new Patriots recap section called “Score”—with more space for big, eye-catching photos, and hopefully greater appeal to advertisers.
A classically salty New Englander, the 52-year-old McGrory had his first job as a kid delivering the Globe on a paper route. He joined up officially as a reporter in 1989 and never left, rising to the position of editor in December 2012. Though his selection was popular in the newsroom, he inherited a difficult situation: After buying the Globe for $1.1 billion in 1993, the Times Company had long since grown weary of its ward to the north. In 2009 the company threatened to shut the newspaper down, only relenting when Globe unions agreed to $20 million in cost savings. Four uncomfortable years later, in February 2013, the Times decided to rid itself of the Globe for good, and put its New England Media Group up for sale.
Several interested buyers emerged, with at least six groups making it to the final round. Those included bids led by members of the Taylor family, the paper’s former owners; local power brokers Jack Connors and John Fish; a private-equity firm from California; and the owners of the U-T San Diego newspaper. Henry entered the sweepstakes late, and his interest came as a surprise.
Throughout the spring, groups of bidders met with top Globe brass, including McGrory and publisher Chris Mayer. The San Diegans, led by a real estate developer and U-T co-owner who refers to himself as “Papa Doug” Manchester, particularly scared Globe newsroom staffers. “There were some potential bidders who would have come in here and in the first weeks, if not days, looked to cut this place by anywhere from 10 to 30 percent,” McGrory says. “And we would have faced widespread layoffs, enormously diminished ambition, and, as a result, probably higher profits, temporarily.”
“Do you have any idea what it was like to sit in a conference room at a downtown hotel, day after day, eating God-awful catered food,” he continues, “sitting there with people who you know just wanted to cut the living bejesus out of the place that you love the second they got their hands on us? And you had to be polite, you had to be informative, and these meetings stretched on forever, five, six hours at a time—most of the time I got so bored I just had to leave.” During the U-T San Diego presentation, people who were in the room attest, Manchester at one point instructed McGrory to call him “Papa Doug.” McGrory did not call him Papa Doug.
Henry’s meeting with the Globe representatives went much better. It took place at the downtown law firm of Proskauer Rose, where the Red Sox owner arrived with a large contingent of advisers. He asked a battery of sharp questions, impressing the Globe delegation. “They had spent a lot of time with the data,” says one Globe exec who was at the meeting. “They were incredibly well informed.”
Henry’s entourage was made up of officials from his Fenway Sports Group, the umbrella company that owns the Red Sox, Liverpool FC, and NESN, among other businesses. He had originally considered making the bid through FSG, because of the obvious Globe-NESN tie-ins, but says he dropped the idea when some of his partners expressed PR concerns. Henry also felt uneasy roping his fellow FSG investors into something as crazy as buying a newspaper. “It’s hard to justify purchasing a business with falling revenues unless you have a solid plan for turning it around,” Henry explains. “No one has found a magic bullet for newspapers or magazines yet.”
His next idea was to lead a philanthropic effort to buy and care for the paper, but Henry was discouraged by people at the Globe, who argued that newspapers should be able to stand as viable businesses. After that, he says he considered bringing on minority owners, but decided that, on his own, he would be freer to make decisions. More partners, the Red Sox owner says, could also have led to more conflicts of interest. He decided to make his offer solo.
Not wanting to look like it was leaving Boston to the dogs (or Papa Dougs), the Times Company had been looking for a graceful exit from the city. Henry’s offer of $70 million cash had the advantage of being debt free, meaning there would be little chance of an immediate, embarrassing bankruptcy or harsh cost-cutting to satisfy creditors. His status as a wealthy, civic-minded local provided even more cover. Though other groups say they presented higher offers, on August 3, the Times Company chose John Henry to be the next owner of the Boston Globe.
When he first arrived in town after buying the Red Sox in 2002, the soft-spoken Henry was derided as an outsider and, worse, a midwesterner. But over the years—and through three World Series championships—the Quincy, Illinois, native’s relationship with the city has grown.
The deal became official on October 24, and shortly after Henry and Pizzuti made a late-night visit to the giant pressroom in the Globe headquarters, a Rube Goldberg–like wonderland of conveyor belts and chutes. Tim McMahon, a pressman since 1975, says it reminded him of the old days, when Globe patriarch Bill Taylor used to walk the floor. In 20 years of ownership, he says, no Times Company officials had ever come to introduce themselves like that. McMahon made Henry and Pizzuti a folded newspaper hat to mark the occasion. The couple returned to the pressroom a few weeks later to pose for pictures with the Red Sox World Series trophies. When Henry offered to join one pressman in a shot, the employee protested, requesting that Pizzuti step into the frame instead. “She had a beautiful dress on,” he says, “and oh my God.”
In the newsroom, Henry’s reception was more complicated, with initial handwringing over his conflicts with the Red Sox. “This was the last circumstance anyone would want,” legendary Globe sportswriter Bob Ryan told the New York Times right after the sale. And though Henry says his only conflict resides “in the sports pages,” the truth is that FSG has broad business dealings that bear attention. Henry and McGrory have promised unbiased coverage, though proof of that can only come with time. “Judge us when something really explosive happens in the Red Sox clubhouse,” one reporter says.
Overall, though, in my many interviews with Globe newsroom members, it became clear that the overriding feeling was optimism and excitement (and relief) over having a local owner with deep pockets and apparently good intentions.
On October 26, two days after his deal with the Times Company officially closed, Henry wrote a nearly 3,000-word op-ed in his new paper explaining why he bought it. “I invested in the Globe because I believe deeply in the future of this great community, and the Globe should play a vital role in determining that future,” he wrote. “I invested in the Globe because it is one of the best and most important news organizations in the world.” The op-ed was a hit.
“We don’t know what’s going to happen with the news business,” one reporter says, “but I think that we feel optimistic in a way we hadn’t under the New York Times in a long, long time.”
As the weeks passed, though, staffers started to wonder what exactly Henry was going to do. The op-ed was a fine mission statement, but what about an action plan? Shortly after Amazon founder and CEO Jeff Bezos struck a deal for the Washington Post—just two days after Henry made his for the Globe—he held a rah-rah town-hall meeting to address his troops. But that wasn’t Henry’s style. “At some point I thought there’d be some sort of grand announcement, but I guess there won’t be,” reporter and editor Scott Allen says. “Not like tablets coming down from on high.”
Another reporter compared the initial months after Henry’s purchase to the scene in The Perfect Storm when crew members on George Clooney’s battered fishing boat see a sliver of sunlight break through the dark clouds, and you don’t know yet whether it represents hope and survival…or if another crushing wave is about to come and blast everything apart.
In 2011 the Globe embarked on a so-called two-brand strategy: BostonGlobe.com was created to house the Globe’s reporting, accessible only to paid subscribers, while Boston.com remained free and was envisioned as the city’s home page: a portal for breaking news, weather, sports, lighter fare, and a handful of Globe stories. As print revenue has dropped, though, digital has not picked up the slack. The print edition of the paper accounted for $264 million in revenue in 2012, while Boston.com was good for $41 million and BostonGlobe.com, with its roughly 46,000 subscribers, a paltry $4.7 million, according to Globe numbers.
To save the Globe, Henry must fix that problem. And so, in November, he hired Andrew Perlmutter, a 30-year-old Harvard MBA and Law School grad who’d most recently been VP of operations at Newsweek and the Daily Beast, and before that had helped run digital strategy for Atlantic Media. While at Atlantic Media, according to Michael Finnegan, the company’s vice president of finance and analytics, Perlmutter had been instrumental in helping launch Quartz, a global business site targeted specifically at businesspeople and designed to be consumed on mobile devices. It’s come to be highly regarded, both for its sharp, voicey content and its apparent economic viability.
Henry gave Perlmutter a broad portfolio—to look for new digital opportunities—and installed him in a vacant office in the Globe’s executive suite, across from the publisher, Mayer. Quickly, the wunderkind exec became known as Henry’s eyes and ears inside Morrissey Boulevard—instead of being responsible to Mayer, he reported straight up to Henry.
Even before Perlmutter came onboard, the Globe was heading toward a strategy of creating niche sites, not unlike Quartz. Under Henry, though, the push has been accelerated. “Part of it is coming from John, part of it is coming from Andrew,” McGrory says. Bennie DiNardo, the Globe’s deputy managing editor for multimedia, explains that, just as Gawker has offshoots focused on sports, tech, and cars, and New York magazine has its culture and lifestyle brands, the Globe envisions creating a network of sites under its own umbrella.
The paper has already launched new brands like the RadioBDC online station, and the arts-and-lifestyle site BDCWire, which debuted last fall. But its next move is more ambitious, and draws more on Boston’s natural resources. It is a standalone tech site, internally being called BetaBoston.
The new site, which was in the works even before Henry’s arrival and which McGrory expects to launch soon, will exist as a separate entity from the Globe and Boston.com. Unlike the paper’s current tech coverage—including BetaBoston’s previous incarnation, a tech blog called the Hive—the site will target tech-community insiders, an attractive group to advertisers, rather than general-interest readers. McGrory would not divulge the staffing level on the project, but, as he explains it, it’s a relatively small financial risk with the potential for large rewards.
According to media analyst Ken Doctor, one of the keys to Quartz’s success, which the Globe would be wise to follow, is that it has a strong, unique voice targeted at a specific audience. “It’s hip,” he says. Media analyst Jay Rosen also points out that Atlantic Media’s and Gawker’s platforms have “national and international scale,” a notable advantage over any Boston-focused site. Still, he says, the gambit is worth trying.
Henry’s seats at Fenway Park are just beside the Red Sox dugout in the front row. Mike Barnicle, the former Globe columnist who resigned from the paper after a plagiarism scandal, sits directly behind him and, over the years, the two have struck up a friendship. (The idea that Henry even talks to Barnicle makes some Globies uneasy—“Just his presence in the background is disturbing,” one told me.) During a game against the Yankees on September 13—Henry’s birthday—the Sox owner sat down next to Barnicle and began to chat about how religion is covered in the news. “He was very interested in how the element of faith plays a role in all of our lives,” Barnicle says. “It was pretty interesting to listen to, but I was trying to watch the fucking ball game.” Henry asked Barnicle if he was familiar with John Allen, a senior correspondent for the National Catholic Reporter. Though not a household name, Allen is the Peter Gammons of the Catholic world—an impeccably sourced must-read on the Vatican. Barnicle says Henry then asked him if he had Allen’s email—it turns out, he did.
Henry emailed Allen and, a few days later, they talked on the phone. “Then I called Brian [McGrory], and he was just as excited as John was,” Henry says. “So we all met in Boston the day after the World Series ended.” Allen started for the Globe in February, essentially writing the same column on the Church that he has for years. The Globe’s hope is to eventually launch a standalone Catholic news site, headlined by Allen and covering local, national, and international churches. “It’s in a very conceptual stage,” Allen says. Though the project has been floated publicly only as a possibility, Allen says it’s what sold him on leaving the National Catholic Reporter, where he’d worked since 1997. “I was persuaded that they were serious,” he says. “They meant it.”
McGrory says he embraced Henry’s idea. “You have a guy who owns the paper who’s offering to expand in an area of journalism in which this area might naturally be intensely interested,” he says. “It was the only time I’ve seen him initiate something like this.”
The boom in interest in the Vatican under Pope Francis is one driver for the Globe’s effort, but there’s more basic math at work: While the Boston area has some 4.5 million people, there are hundreds of millions of English-speaking Catholics in the world.
More broadly, Henry believes there’s no reason that Boston’s paper of record can’t be as influential as the city itself. If Boston is a tech center, then the Globe can own tech. If Boston is a capital of Catholicism, then the Globe can own Catholicism. In a similar vein, Henry has approved the expansion of the Globe’s highly regarded Ideas section, hoping to draw more smart voices from the city’s vast intellectual plant into the paper. “He sees Boston in a much, much wider frame,” says Globe editorial page editor Peter Canellos, “and sees Boston as a global city, as a place of real innovation and national leadership.”
If BetaBoston works, similar endeavors covering topics like education and medicine will likely follow. As Henry has said publicly, his plan is for the Globe to focus on what it’s good at. Part of that process will be shrinking some departments and growing others, especially on the digital side. “We probably need five times the developers we currently have,” he says. As for any other departments requiring cuts or growth, “It’s too early to say.”
Ken Doctor believes that the Globe’s niche strategy is a smart and creative play. Over the past six years, he points out that newspapers nationwide have lost 55 to 58 percent of all print ad revenue. Niche sites likely can’t single-handedly replace that big a chunk of money, but as Henry is keenly aware, every bit helps. That’s also why, since arriving, he has been focused on another of the Globe’s digital properties: Boston.com.
Late in the morning of December 24, John Henry poked his head inside a large conference room on the third floor of the Globe. Everyone there knew that they’d better look busy. Not long after the new owner’s arrival, the space had been converted into a boiler room for a team of about 10 developers, designers, and project managers working to redesign Boston.com. During the bidding process, Henry had been told that the project, launched in May, would be done by January, but, much to his frustration, progress had been slow. To speed things along, the staffers had been moved to and sequestered in the room.
Henry’s brief visit was pleasant enough, but after he left, everyone breathed a sigh of relief that they’d come into work before the holiday. “Everybody got a gold star that day,” says one Boston.com employee. When I asked DiNardo, the multimedia editor, when the redesign would be ready, he replied, “You’ve been talking to John Henry. He’s been asking that question every day.” The target is now the end of the first quarter.
Inside the Globe, Boston.com is regarded as a great, underutilized asset. Publisher Chris Mayer’s plan was to slowly separate the site from BostonGlobe.com, but as Globe execs have continuously pulled Globe material away from Boston.com over the past three years, the site has suffered, losing both its sense of purpose and traffic. The Boston Business Journal has reported that, between 2010 and 2012, page views plummeted 24 percent, from 188 million to 143 million, according to the sale book on the Globe commissioned by the Times Company. Globe editors refute those numbers, though, and say that an uptick in mobile users has pushed traffic up from last year.
The vision for the new Boston.com is to be, as Henry puts it, “a phone-first website” and totally independent of the Globe—something like a mixture of the Huffington Post with BuzzFeed. He’s dropped in on several meetings and made additional visits to the Boston.com boiler room.
“He is very interested in design aspects of the site,” DiNardo says. “He was encouraging the designers to make the images larger on parts of the site. He wanted a more visual presentation. In general, that is the direction of the redesign. Plus, if John Henry says it, of course I agree with it.”
Meanwhile, changes are afoot at sister site BostonGlobe.com. Around the same time as the Boston.com relaunch, BostonGlobe.com will switch from a hard-paywall model, where all Globe content is behind the curtain, to a New York Times–style metered model, where readers will be given a certain number of free stories each month before being asked to pay. “It was being talked about before he came, but his presence accelerated it,” DiNardo says.
Some staff members have begun to chafe at their boss’s impatience and inexperience, though. After Henry bought Liverpool FC in 2010, Globe sports columnist Dan Shaughnessy made a habit in his column of asking whether he was spread too thin to effectively run the Red Sox (in case you’re wondering, McGrory says Shaughnessy has “the safest job in New England”). Now Henry has the Red Sox, Liverpool, and the Globe.
One Boston.com employee complains that it’s hard to command Henry’s focus, and that he doesn’t adequately understand what’s involved in relaunching a site so large and complex. “He forgets things you’ve already told him,” this person says. “Two months later you hear the same questions.”
“I can’t imagine all of the things he’s dealing with,” the employee continues. “‘What did you do last weekend, John?’ ‘Oh, I traded a soccer player for $82 million.’”
Henry dismisses the notion that he’s too busy—or, in fact, that he’s ever been too busy. “When the Red Sox had a terrible year, some people wrote that I was too focused on Liverpool. But the truth was that I hadn’t been there in a year,” he says. “The fact is I don’t operate the Red Sox or any of the individual companies we own.” With the Red Sox, he says CEO Larry Lucchino, general manager Ben Cherington, and manager John Farrell run the show. His role, he says, is “to make strategic, long-term decisions.”
Henry adds that closing off his commodities trading firm to clients at the end of 2012 has also helped free his calendar. “I have time to devote to the Globe, and I’m greatly enjoying every day I’m there,” he says. “I try to be there as often as my schedule permits.”
I think very differently than I did seven months ago,” Henry says. “I used to think this was solely a move from a legacy print business to a digital future. But it’s far more complicated than that.” Advertising and subscription revenue may be declining, but the Globe print product still represents about 70 percent of Boston Globe Media’s revenue, and it demands careful management.
On January 8, Henry made his first big speech as the owner of the Globe, at a Greater Boston Chamber of Commerce breakfast. He offered few specifics, instead vowing to make the paper “aggressively relevant” and waxing at length on all of Boston’s great virtues. The Globe will rededicate itself to customer service, he told the crowd, both for advertisers and subscribers. His message to the business community was clear: His bet on the Globe was really a bet on Boston, and he needed the entire city’s help—and especially the help of anyone present interested in buying an ad.
One way Henry has been trying to reach out to the community is through reviving the Globe Foundation. Pizzuti has taken charge of it, and set up an office in the paper’s executive suite. (She also, according to Henry, “serves on a number of internal committees that deal with real estate, circulation, social media, and other business issues.”) She’s spearheading a new program, announced by Henry at the chamber breakfast, that lets subscribers donate vouchers for free advertising to a nonprofit of their choice.
Later that day, publisher Chris Mayer—who’d been at the paper for nearly three decades—announced he would be stepping down. His departure wasn’t exactly a surprise, even if announcing it on the same day as Henry’s speech seemed odd. Mayer, who will stay on as an adviser, was used to running the show, and having a new boss like Henry, given to asking lots of challenging questions, had proven awkward. “I have a different management style and philosophy,” Henry says. “The organization needed to move in new directions that could only come from new management.”
When Jeff Moriarty, the general manager of Boston.com, took a new job at the Johnston Press in Britain just a few weeks later, Henry promoted Perlmutter to the expanded role of overseeing all digital business. Then, in late January, Henry named himself publisher and hired former Hill Holliday boss Mike Sheehan, who had been serving as a consultant, to be his CEO. Though Henry says the Globe’s management structure will be dictated by the paper’s specific needs, it broadly mimics the system he’s set up for the Red Sox: Sheehan says he will run the day-to-day business of the Globe, with a special focus on finding new revenue, while Henry focuses on the big picture.
In the search for new money, Sheehan has promised to be creative and open to anything, as long as it respects editorial independence. That could mean more native advertising, allowing a single advertiser to sponsor an entire section, or something else entirely. One new source of revenue, at least down the line, could be the creation of a Globe TV network, which Henry floated the idea of in his chamber speech. “We will get to it,” he tells me. “It’s a natural fit for the Globe.” In the meantime, Globe officials are busy at work on new collaborations with NESN. “I would bet that if you look at the Boston Globe Media Group a couple years from now, it’ll be much different than it is today,” Sheehan says.
The flow of new ideas—and the money to actually fund them—is more than welcome in the Globe newsroom. Even if the future is uncertain, for the first time in years, there’s a sliver of sunlight on the horizon. “We ended up with a good owner,” McGrory says. “And we ended up with an owner who is hell-bent on not cutting.”
Henry’s midwestern reserve has made him hard to figure over the years, even to those reporters who met him on his first trip through the newsroom. But maybe his shyness has just been masking something we should have seen all along: an audacious sense of self-confidence. Without knowing anything about Boston, he bought the Red Sox. Without knowing anything about soccer, he bought Liverpool. And now, despite being a total industry novice, he thinks he can save journalism.
Speaking at the Chamber of Commerce event in early January, Henry talked about his arrival in town. “Although I didn’t know it at the time, it turns out I was more the New Englander than I thought,” he said. “I know you don’t become a New Englander, you’re born and raised a New Englander, but I’m sort of like an Irish fighter who thinks he’s a heavyweight even though he weighs 160.”
Now Henry’s fight has just begun. “Newspapers and magazines have to adapt in ways that make sense,” he says. “There is a lot riding on this.”
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