New York Times Sticks With Beantown

"Why should they even entertain that?" says Atorino. "They used the dual-share system in the first place so they wouldn't have to give in to stuff like this."

The Globe has been a big drag on its parent's profitability while its circulation reach dwindles as consumers in tech-savvy Massachusetts embrace the Internet for their information needs. For its third quarter, the Times reported a 5.1% decline in newspaper ad revenue. Its New England media group, which includes the Globe, posted a 12.4% drop, and the trend continued in October.

The company also had come under fire from Massachusetts politicos for slashing payrolls at the Globe and gutting its editorial operations. The criticism echoes similar complaints directed at Tribune (TRB Quote) and its management of the Los Angeles Times from local business groups in L.A.

Meanwhile, there is a proliferation of local investors approaching national media conglomerates in hopes of buying their hometown dailies. Recently, a local group bought The Philadelphia Inquirer and Philadelphia Daily News from McClatchy(MNI Quote) for $515 million. Similar groups are also lining up in Los Angeles, Baltimore and Hartford, Conn., to bid for major metro dailies owned by Tribune as the company goes on the auction block.

For its part, New York Times is clinging to the Globe with hopes of weathering the storm that has hit the industry in the form of technological transformation. There's little hope on Wall Street that the company will ever recoup its investment in the Beantown paper, but the Sulzbergers seem ready to try whether investors are with them or not.

"They believe they can get the circulation to stabilize and get the costs down over time," says Atorino. "They're trying to work out a deal with the union. Things are looking good with the newspaper's Web site, Boston.com, and there's hope that has new retailers open shop in Boston in the near future, the tide will turn and things will start looking up. It'll take time."

Shares of New York Times recently were down 13 cents, or 0.5%, to $24.24.