The Globe Sale Through a Higher Ed Lens

Industries and change and value.

August 4, 2013

20 years ago The Boston Globe fetched a price of $1.1 billion. This week the NYTimes unloaded the paper for $70 million to the guy who owns the Red Sox.

The question is are there any lessons for higher ed in this story?

I tend to think that journalism (particularly newspapers and news magazines) and higher ed sort of go together.  

We are both industries with a social mission, an orientation that is increasingly challenged by the entrance of new players and new models. Both higher ed and journalism have seen the power and privileges of incumbents erode, as old business models and ways of operating are less relevant in an age of information abundance and zero cost digital communication. Print news organizations and higher ed both face a future where our services will be unbundled, and the cross-subsidies enjoyed by our less profitable operations will cease to flow.  

So does the fact that the Boston Globe is worth 93% less than what it was 20 years any kind of warning sign for higher ed?

Can we imagine a future that in 20 years that our own value, at least measured in terms of revenues and expenses, is dramatically less than it is today?

If individual colleges and universities were to follow a similar trajectory over the next two decades as the Globe did in the past two decades what would that actually look like?

This is not to say that the higher ed industry as a whole will follow the path of the newspaper industry. The forces that destroyed the traditional revenue stream of newspapers, the emergence of the internet and the disappearance of the classified advertising market with the appearance of craiglist.org and eBay, probably could not have been predicted in 1993.  

Unlike newspapers in 1993, the forces that could disrupt the existing higher ed business model in 20 years hence seem pretty clear. What will happen when credentialing becomes disconnected from educating? What will be the impact when competency-based degrees become the norm?  How will we replace public dollars in the face of a wholesale state level dis-investment in their public postsecondary institutions? Will smaller private institutions without large endowments or other sources of funding be able to remain solvent in the face of rising compensation costs and operational expenses, as their ability to raise tuition is constrained by new competitors?

I wonder if in 1993 some people at the NYTimes questioned the wisdom of paying over a billion dollars to buy the Globe. We're there some voices within the company that said, "We should invest resources to create our own new businesses."  Or others that said that perhaps a better approach than a big acquisition would be to figure out a partnership, one where advertising and back-office operations could be shared but without the need for one company to buy-out the other.    

If there were those contrary voices at the NYTimes in 1993 they were no doubt drowned out by the momentum of the acquisition. I'd like to figure out a way to listen to those people working today in higher ed who are asking questions about our current strategies and plans. Can we find those people who care about their colleges and universities as much as those in charge of running the place, but who are working at the margins without a platform or voice to air their ideas?  

It is possible to imagine an alternative history in which a service like craigslist.org or eBay came out of the NYTimes. Are we moving aggressively enough within higher ed to find models of post-secondary education that will work in 10 or 20 years from now?  How much of our time and resources are we investing in building for the future? How much should we be spending?  Whose job would it be to imagine a 20 year time horizon that mimics the Boston Globe, and then works to figure out what about the status quo needs to change to avoid that particular fate?  

What lessons can you draw from this story? 


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