Julia Angwin of the Wall Street Journal writes a devastating analysis ($link) of the billion dollar boo—boo Pinch Sulzberger made when he bought the Boston Globe and related properties.

When the New York Times Co. bought the Boston Globe in 1993 for $1.1 billion, the family—run New York newspaper said it was betting heavily on the future of the highly educated, affluent Boston market.

But now that brainy, well—heeled populace turns out to be on the leading edge of a digital migration that is pummeling the Boston Globe so badly that it is on track for its first unprofitable year in its recent history, according to people familiar with the company's finances.

The Globe quietly cut its news hole a whopping 10% and has started putting ads on the front pages of its sections, but ads and revenues are still plummeting.

Perhaps Pinch, who attended Tufts University as an undergrad (and apparently still carries with huim his 1960s values), craved the approval of the Boston intelligentsia, and wanted a lock on the Northeast Corridor upper middle class demographic. If so, he was blind to the emerging erosion already int he cards for newspapers when he made the fateful buy of what truns out to be a rapidly declining business.

The WSJ article came out just before the NYT Company released its earnings. They are bad. Circulation and advertising are both down.

Net income dropped to $14 million, or 10 cents a share, from $23.1 million, or 16 cents a share, a year ago.

The company took a charge of $7.4 million, or 3 cents a share for job cuts, and $7.8 million, or 3 cents per share, on the sale of its investment in the Discovery Times Channel, it said.

Discovery Times Channel was another foolish decision costing his shareholders money. Meanwhile, the core business languishes.

"Our third—quarter results reflect the continued weakness in the print advertising marketplace," Chief Executive Janet Robinson said in a statement.

Hat tip: Ed Lasky

Thomas Lifson   10 19 06