Friday, May 27, 2011

Morning Brief: The austerity cult must have its pound of flesh; the sad state of McClatchy; money for Broadway

Holidays are a time when one can getg a good sense of the economic conditions: when times are good media folk are usually busy trying to clear their desks of projects, finishing up publications, scrambling to get ad copy, during bad times there is usually a question about whether one should take a few extra days off.

Thanks to the austerity crowd, a cult really, many economists see the US economy sliding back into recession. The Congress, both parties, appear to have joined the austerity cult, as they search for ways to pull another trillion dollars out of the economy – growth through contraction.

For some, austerity is a philosophy, the government should only be in the war making and corporate subsidizing business. For others, it is what one does when one hasn't a clue how to create growth. Which leads us to . . .

McClatchy said it has sold its building which houses The Miami Herald for $236 million to Bayfront 2011 Property LLC, a unit of Genting Malaysia Berhad (a Malaysian company which is in the gaming and resort business).
"This property, located on Biscayne Bay, has been home to The Miami Herald for many years. While locating newspaper operations on the bay may have made sense in the past, it no longer is the best fit," Gary Pruitt, McClatchy's chairman said.

The money will be used to contribute to its pension plan and to pay down debt.

No word on where the paper will relocate to after it ends its two year lease of the same property it has just sold. Maybe they will just home office everyone, assuming they can find an employee willing to have printing presses in their living room.

“I’m sure the Globe’s for sale,” James Boyce, founder of Common Sense New Media Strategies, a Boston-based consulting firm told Jessica Heslam of the Boston Herald.

“The problem is," Boyce continued, "if the buyer pays a fair market price, I doubt the seller is going to want to sell it for that. It’s a matter of, is there someone who is going to overpay for it, or is the New York Times Co. going to sell the Globe for what it’s actually probably worth?”

The Boston Herald no doubt loves such talk, but the rumor that the New York Times Company would love to dump the Globe has been around a long time. I feeling is that the NYT won't sell the business until it needs money to launch a new Broadway production of No, No, Nanette.