Paper Chase
Back in 1969 when Ralph Crowley Sr. signed a long-term lease to open and run a ski area at Mount Wachusett in Princeton it was widely seen as a bold and risky proposition.
What did the CEO of a beverage bottler know about running a ski area? Well, not much, but after an inevitably bumpy start he learned a lot, put the right people in charge, and left a legacy of two very successful businesses to his five children.
Some 40 years later the Crowley children, led by Polar beverages CEO Ralph Crowley Jr., along with former T&G Editor Harry Whitin and some unnamed investors, are close to making another bold move to expand the family’s business portfolio.
This time they are making a bid to get into the daily newspaper business by buying the Worcester Telegram & Gazette from its current owner, the New York Times Co.
It’s a move that makes a lot of people shake their heads and wonder what they are thinking. It’s a risky proposition, but one that would make the old man proud.
Red All Over
Why would the Crowleys be interested? They’ve publicly stated the threat of Worcester losing its daily newspaper is unacceptable to the community.
But in the cold light of day, this is a business deal, and the opportunity to purchase and turn around an established century-plus old publication for pennies on the dollar is a tempting proposition.
The Times paid $296 million for the paper 10 years ago, and the bid range for the T&G today is reportedly in the $10-$15 million, perhaps even less. Oh, how the mighty have fallen.
What does the Crowley group have going for it? Its name, its strong reputation and its record of business success.
The Crowleys have figured out how to grow and make money in some notoriously tough industries. Their feeling must be that they can apply those business principles to the T&G and make it profitable. And they’ve got another generation entering the workforce and ready to continue the family business.
Also, the rock bottom price. Many private investors who have bought newspapers over the last few years, at what they thought was an attractive price, have been swallowed by their own debt service.
Plummeting revenues have not been able to keep up with bank payments, and many well intentioned deals where community leaders had stepped forward to “save the paper” have gone sour. And third, owning the paper would allow them to aggressively advertise Polar Beverages, Wachusett Mountain and the Wachusett Village Inn with few direct costs.
On the down side, the paper is attracting rock bottom offers for a reason. The daily papers business model is broken, and even the smartest media minds in the business are struggling to invent a new, sustainable way of running a newspaper.
Doing the deal with the New York Times to buy the paper is probably the simple part, it’s how to operate the organization going forward that is the most daunting.
Some may complain about a dearth of local coverage today, but what would that coverage look like should there need to be further significant staff reductions?
Current advertising and circulation operations are bundled closely with the Boston Globe.
Will untangling those operations allow any of the expertise and knowhow to perform those functions at a high level to remain in Worcester? Will the value of insider Harry Whitin in the ownership group work in their favor, or will his deep knowledge of the organization become more of a hindrance than a benefit over time? And will the group be able to negotiate a workable deal with its unions, who certainly hold important cards in the true operating costs of the business?
New England’s second largest city relies heavily on its daily paper to be the voice of its community.
While it does not seem feasible that the Times would ever close the Telegram’s doors, it seems inevitable that fewer and fewer resources will go to producing it over time, and that sooner or later it will divest of the Worcester paper.
The Crowley group's bid for the T&G is intriguing and a potentially positive outcome for the paper, its 500 or so staff and the Worcester community at large.
Here’s hoping they close the deal.
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