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New York Times Puts NESN Stake On Block

On the heels of a poor earnings report - net income was down 47.5% in the fourth quarter - The New York Times Co. said Wednesday that it has retained Goldman Sachs & Co. as its financial adviser to explore the possible sale of its 17.5% interest in New England Sports Ventures, the entity that owns Major League Baseball's Boston Red Sox and an 80% interest in regional sports network New England Sports Network.
The Times acquired its interest in NESV - which also owns Fenway Park, and 50% of Roush Fenway Racing, a leading NASCAR team - in February 2002. NESN is available in more than 4 million homes.
Speculation that The Times would sell its NESV stake has been brewing for months. In December, an article in The Wall Street Journal article estimated that the 17.5% stake was worth about $166 million, but that the paper was hoping to attract as much as $300 million.

According to The Journal, the Times originally invested about $75 million for the stake, the second largest in NESV behind Red Sox owner John Henry.
SNL Kagan analyst Derek Baine estimated that NESN alone is probably worth about $443 million, which would represent a multiple of 11 times cash flow of $40.2 million. That would make The Times stake in just the network worth about $60 million.
But Baine said selling the interest won't be easy.
"It's hard to sell something which is a minority interest unless the existing owner wants to increase its stake," Baine said in an e-mail. "There is often a minority discount of 20-25% when you don't have control over the asset."
In addition to Henry and The Times, NESV's has 12 other limited partners. In the past few years, four partners have sold their interests back to the partnership, including former John Hancock CEO David D'Alessandro, who in 2007 sold his less than 1% interest for $10.5 million, double his original investment of $5 million, The Journal said.