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MEDIA
At the Herald, waiting for the shoe to drop
BY DAN KENNEDY

Employees of the Boston Herald and the more than 100 community newspapers owned by Herald publisher Pat Purcell are bracing for the possibility of deep budget cuts, including layoffs. The anticipated move is the latest sign that the weak economy continues to take its toll on the newspaper business.

Those in the know arenít saying much, but they acknowledge there will be an announcement sometime soon. Purcell referred an inquiry to his spokesman, George Regan, who said, "Basically, there are changes coming. Itís not finalized. And it would be inappropriate to discuss it now. Itís all geared toward making it a better product."

Regan would not elaborate when it was suggested that his "better product" remark appeared to be at odds with the notion of cuts.

Herald managing editor Andrew Gully also declined to discuss the anticipated cuts. Asked when there would be an announcement, he said, "I donít honestly know. Itíll be soon, but nothing I want to talk about at the moment." Gully, editor Andy Costello, and consultant Ken Chandler, a former Herald editor, are said to have met repeatedly with Purcell in recent weeks.

The expected announcement follows months of anxiety over the Heraldís circulation slide and revenue squeeze. Earlier this year, Chandler ó an ex-publisher of the New York Post ó led an effort to transform the Herald into a glitzier, more gossipy tabloid with shorter stories, blaring headlines, and lots of cleavage. At a newsroom meeting this past May, Purcell defended the changes as necessary for keeping the Herald alive (see "Donít Quote Me," News and Features, June 20).

Now, with the prospect of possible layoffs looming, anxieties are boiling over.

"Everything is speculation and rumor," says Herald staffer Lesley Phillips, president of the Newspaper Guild of Greater Boston. "Attempts to get the company to talk to us and verify and confirm or deny the rumors have been stonewalled. I would say the stress level here has been raised to an all-time high." She adds: "I just wish theyíd be forthcoming, because morale around here is the pits."

Yet others say rumors of a crisis may be exaggerated. There are unfilled positions, including two in the political unit and three or four general-assignment slots. But the Herald continues to assign reporters to travel with hometown presidential candidate John Kerry, and sent a reporter to New Mexico last Friday to cover the Democratic presidential debate.

The pending announcement also comes at a time when some observers believe Purcell might be getting ready to sell the Herald back to former Herald owner Rupert Murdoch, assuming the FCCís recent decision to ease its rules against cross-ownership are upheld (Murdoch owns Channel 25). And, despite the budget squeeze, sources say that Purcell would still like to buy a radio station. Several months ago, there were even published reports that the Herald was considering hiring former Boston Globe columnist Mike Barnicle, who would presumably command big bucks.

There was one weird ó if coincidental ó twist to the Herald story this week. On Tuesday, the paper published an Associated Press story reporting that the Audax Group, a private investment firm based in Boston, had pulled the plug on its $45 million investment in Indian Motorcycle, leading to the immediate layoff of all 380 employees.

Audax, as it turns out, was instrumental to Purcellís purchase of Community Newspaper Company (CNC) from Fidelity for a reported $150 million in 2001. According to the Boston Business Journal, Audax and another investment firm, Weston Presidio, put up $60 million in equity.

Might Audaxís action with regard to Indian Motorcycle signal increasing impatience on the part of its investors ó impatience that could extend to the Herald and CNC? Regan ó who is also the spokesman for Audax ó called it "a fair question," but said that one had nothing to do with the other. "Audax is a company thatís doing very, very well. The Heraldís doing well," he said.

Despite signs that the economy is slowly recovering, the newspaper business continues to lag. Just last week, the New York Times Company, whose holdings include the Globe, announced that unexpectedly weak advertising sales in July and August would result in the companyís falling short of investor expectations for the third quarter.

The Globe is also in the midst of an increasingly testy dispute with the Newspaper Guild, whose members have been working for nearly three years without a contract.

This November, the Guildís contract with the Herald expires as well.


Issue Date: September 26 - October 2, 2003
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