UPDATE 3-New York Times scraps plan to sell Boston Globe

* New York Times will keep The Boston Globe

* Times Co says Globe's financial position has improved

* Still assessing options for Worcester Telegram & Gazette
(Adds background on reported bids, adds Worcester detail)

By Robert MacMillan

NEW YORK, Oct 14 (Reuters) - The New York Times Co (NYT.N: 行情)
said it has given up its plan to sell The Boston Globe and
related businesses after drastic cuts it imposed on the daily
newspaper earlier this year improved its financial position.

The announcement caps a painful odyssey for the
137-year-old Boston Globe that began earlier this year when the
Times threatened to close the paper if it could not get its
unions to agree to deep cost cuts.

Selling the Globe would have been a dismal exit from Boston
for the Times. The company spent $1.1 billion to buy the Globe
in 1993, at the time the most money ever paid for a single U.S.
newspaper. The offers it reportedly received for the Globe this
month were less than 10 percent of what it paid.

The Times did not mention the bids and officials were
unavailable for comment about whether they played a role in the
decision to stop the sale. The company instead said the Globe's
financial outlook has brightened.

"The Globe has significantly improved its financial footing
by following the strategic plan it set out at the beginning of
the year," Times Chairman Arthur Sulzberger Jr. and Chief
Executive Janet Robinson wrote to Globe workers on Wednesday.

"All along, we explicitly recognized that a careful
restructuring of the Globe was one possible route and, thanks
to your hard work, that is precisely what has been done," they
wrote.

Robinson plans to meet Globe employees in Boston on
Thursday, they added.

"I think many of us felt that the more we learned about the
potential buyers, the more the Times seemed to be the best
possible owner for us," said Michael Paulson, a reporter who
covers religion for the Globe.

When the decision was announced in the newsroom, he said
"there was no celebration but there was a sense of relief."

The Times said in August that it hired investment bank
Goldman Sachs Group Inc (GS.N: 行情) to explore a sale of its New
England Media Group, which includes the Globe.

The company did not say whether stopping the sale process
was related to two offers it reportedly received last Friday,
the day it had set for bids on the paper.

California investment firm Platinum Equity submitted a bid,
according to the Globe, as did a group led by Stephen Taylor,
whose family sold the Globe to the Times Co.

The groups made preliminary bids of about $35 million, plus
the assumption of $59 million of pension liabilities, the Globe
said.

"Everything's for sale if the price is high enough and it's
clear that whatever was offered wasn't high enough," said Beth
Daley, a reporter who covers the environment for the Globe and
is a delegate for the Boston Newspaper Guild, a union that
tussled with the Globe earlier this year over cost cuts.

The Times and most other U.S. newspapers have been
struggling to improve their finances as the recession and a
shift of readers from newspapers to the Web hurts ad revenue.
Some papers have shut down. Other publishers have tried to shed
money-losing properties.

The Times said labor contract concessions would save the
company $20 million in annual operating costs and consolidated
printing facilities would save it $18 million a year. It also
has reduced compensation for Globe managers and other non-union
workers and has raised newsstand and home delivery prices of
the paper, the memo said.

Previously, the Times said it forecast an $85 million
operating loss for the Globe this year. Even with the savings
it outlined, the paper likely will report a significant
operating loss. Times officials were unavailable for comment on
the Globe's financial position.

The Times, in a filing with the U.S. Securities and
Exchange Commission, said it was still considering options for
the Telegram & Gazette, a daily paper that serves Worcester,
Massachusetts, a city about 40 miles west of Boston.

The Times wants to reach a decision soon "and we will
provide a full update to our colleagues as quickly as
possible," Sulzberger and Robinson wrote.

It did not say if it is still trying to sell its interest
in the company that owns the Boston Red Sox baseball team.

The company will report third-quarter results on Oct. 22.
(Reporting by Robert MacMillan; additional reporting by
Ritsuko Ando; editing by Gary Hill, Matthew Lewis and Andre
Grenon)