Could the New York Times default on its loans? If the cash-short newspaper concern does not unload its stake in the Boston Red Sox soon, it could face a fastball from creditors.
The problem: The Times must repay a $400 million line of credit by May. Its advertising revenues are falling even faster than expected. And it is raising $225 million by mortgaging part of its headquarters.
The newspaper company's stake in New England Sports Ventures, which owns the baseball team, its Fenway Park home stadium, and a cable network which broadcasts its games, is worth an estimated $166 million. The Times, according to the Wall Street Journal, is seeking $300 million, or nearly twice that amount.
The Times, which bought its interest in the team in 2002 in an effort to buttress advertising sales at The Boston Globe, another newspaper it owns, is acting like a homeowner whose house was once worth considerably more than it is today. Sports teams, like other toys of the wealthy, have declined in value. But it would be far better off getting the stake sold than holding out for more money. If the Times is still in the baseball business by Opening Day in April, we'll be talking about red ink, not Red Sox.