Media Nation

The Boston Herald is not only debt-free as a result of publisher Pat Purcell’s sale of his Community Newspaper Co. (CNC) division; it also made a small profit last year. At least that’s what Purcell told Herald employees at a newsroom meeting on Monday, according to a respected insider.

Purcell has always played his finances close to the vest, so figuring out how well he is or isn’t doing is inevitably a matter of educated guesswork. According to “a newspaper executive who considered buying Purcell’s properties,” the Herald lost $2 million last year, whereas the 100-newspaper CNC chain made $20 million. I can’t explain the disparity between that account, reported by the Boston Globe’s Steve Bailey, and Purcell’s version. But I can guess:

• The drastic cutbacks Purcell implemented last year — slashing the newsroom by 25 percent by the end of June — may have finally taken hold, transforming a money-losing operation into a slightly profitable one.
• The Herald and CNC share a lot of content; not only is the Herald loaded with CNC copy these days, but a vast chunk of the sports section in the Framingham-based MetroWest Daily News, the CNC flagship, consists of Herald coverage. Such cost-sharing allows for quite a bit of creative accounting. And perhaps it was to Purcell’s benefit to pump up CNC’s numbers while having the Herald show a loss on paper.

According to my correspondent, Purcell told his troops that after paying off the debt he took on to purchase CNC (for a reported $150 million) in 2001, and paying a 35 percent contractural fee to his investors, the remainder of the $225 million CNC sale went to the Herald. Purcell wouldn’t say how much that was, but insiders estimate that at roughly $10 million to $20 million. Purcell added that neither he nor his family made any money on the deal, saying that all of it was rolled into the Herald.

So what’s next? Additional cuts and/or layoffs are possible, but Purcell said he has not yet decided whether that will be necessary. He said the Herald and CNC, under new owner Liberty Group Publishing, will continue to share content and advertising, and that he wants to reduce costs on the production end. Reportedly there was a lot of talk about growth and change, too, especially with respect to the Internet. Weekday circulation continues to plunge toward the 200,000 mark, but Purcell said the Herald’s Web site received 12 million hits in March. That should translate to roughly 2 million visitors, which isn’t bad.

One thing that has always impressed me about Purcell is his ability to inspire his employees. In a dozen years of writing about the Herald, I’ve almost always found it to be an incredibly loyal place with a circle-the-wagons mentality when any outsider would dare to criticize the paper. The only exception was a couple of years ago, when Mike Barnicle, who’d lost his Globe column because of ethical transgressions exposed partly by the Herald, was hired, and when well-regarded editor Andy Costello was removed from his post. But Barnicle’s gone (except for an occasional contribution), and, despite massive cutbacks, morale appears to have recovered.

Certainly it doesn’t hurt that Purcell has chosen to stand and fight. It may be true that no buyers wanted the Herald. But after selling CNC, Purcell easily could have taken his millions, shut the Herald and enjoyed a lucrative early retirement. That he didn’t shows that money isn’t the most important thing to him. You can’t say that about too many other newspaper owners these days, and you have to respect him for that.

Will it work? It has to be said that Purcell’s grand strategy of pumping up the Herald with his CNC purchase was, at best, a partial failure. The debt apparently proved to be too much, and he now finds himself the owner of an urban number-two paper with no other properties. Consider this, from Purcell’s front-page essay on Monday:

My priority has always been to keep the Herald viable. The acquisition by Herald Media of Community Newspaper Company in 2001 was a key part of that strategy. And it worked.

I’m very proud of the job we did in making Herald Media a success. But as I announced on Saturday, CNC will soon be under new ownership.

There’s really only one possible reaction to those two short paragraphs: Huh? Nevertheless, Purcell — and the Herald — are still here. I wouldn’t count them out.

The spring issue of CommonWealth Magazine has hit the Web. And I’ve got a story on Paul La Camera, the veteran television executive who’s now the general manager of WBUR Radio (90.9 FM), Boston University’s public-radio powerhouse.

My focus is on La Camera’s efforts to transform ‘BUR into a local force without giving up its reputation for covering national and international issues. Key quote from La Camera: “I just believe that if we’re going to make as full a contribution as we ought to make to an informed citizenry, part of that has to be local reporting.”

At what point does protest start morphing from free speech into censorship? Folks at Boston College have every right to protest the decision to invite Secretary of State Condoleezza Rice as the commencement speaker. But don’t students have a right to hear from Rice, too?

I particularly like this, from today’s Boston Globe:

“I am a Democrat and I don’t agree with the war, but I have no problem with her coming here,” said Margaret Reed, a senior political science major. “She is the secretary of state, she is an influential person, a black woman who has risen to power, and there is no reason to protest. I am so frustrated by this.”

The editors of BC’s student newspaper, the Heights, don’t seem particularly exercised about Rice’s upcoming appearance. Here’s an excerpt from an editorial:

There is certainly nothing wrong with questioning Rice’s role as speaker for BC — a respectful and intelligent campaign can at least make BC consider these arguments when selecting future speakers and degree recipients.

Further, convincing arguments can be made that Rice is more qualified than most to give a commencement address….

Politics aside, this is a woman with a lot to say about academics, public service, leadership, and the world.

That strikes me as a mature, measured response — something that seems to be missing on the other side.

Media Nation reader D.H. passes along this depressing news — depressing, that is, for those of us who were/are fans of former CNN anchor Aaron Brown. It turns out that his boy wonder replacement, Anderson Cooper, hasn’t even managed to achieve Brown’s ratings, making Brown’s departure not just lamentable but wholly unnecessary. According to Variety:

Brown averaged 307,000 young [i.e., those between 25 and 54 years old] viewers a night last year. This April, Cooper averaged 198,000. In total viewers, Cooper averaged 710,000 compared to 907,000 for Brown last year.

Media Nation has a theory. Brown was successful in attracting nearly everyone who wanted to watch a relatively serious newscast at 10 p.m. — it’s just that there weren’t that many of them. Cooper is neither serious enough to hold onto Brown’s audience nor sleazy enough to cut into Greta Van Susteren’s numbers. Cooper’s a tweener, in other words.

No offense to Cooper, who seems like a good guy who wants to do well. Rather, this is all about CNN president Jonathan Klein, who clearly has no idea what he’s doing, and who nuked the best newscast on cable (admittedly akin to records involving left-handed rookie second basemen whose names begin with “M”) for what turns out to be no reason whatsoever.

There’s a wonderful moment in “Citizen Kane” when Charles Foster Kane is confronted with the fact that his New York Enquirer is losing $1 million a year. “You’re right,” Kane replies. “We did lose a million dollars last year. We expect to lose a million next year, too. You know, Mr. Thatcher — at the rate of a million a year — we’ll have to close this place in 60 years.”

Boston Herald publisher Pat Purcell today summons Orson Welles’ bravado, if not his insouciance, in a front-page essay accompanied by a photo of his smiling face. Beneath a headline that reads, “You bet we’re alive — and kicking!,” Purcell declares:

So let me dash the fondest hopes of the politicians, the prognosticators and our competitors at the Globe:

The Boston Herald is here to stay.

Two-newspaper cities are a vanishing species. That’s a real shame. Monopolies in any business hurt the consumer. And you — our readers — would lose most if coverage of Boston was filtered through the lens — and the agenda — of one paper.

Well, long live the Herald. And I think it would be foolish to predict the Herald’s imminent demise after a deal that supposedly left Purcell debt-free. But according to the Globe’s Steve Bailey, the Herald lost $2 million last year, even as Purcell’s 100-newspaper suburban chain, Community Newspaper Co. (CNC) — which he just sold — made $20 million. I have no idea how long Purcell can continue to lose $2 million a year, but I’m sure it’s not 60 years.

The overwhelming challenge facing Purcell — and every newspaper publisher — is that what’s going on now isn’t cyclical. The advertising that’s disappeared in recent years isn’t coming back. Classifieds, always the most lucrative part of a daily, have largely absconded to Craigslist and Monster.com. Consolidation has eliminated all but a few department stores and banks and, thus, their ad budgets.

Large, profitable media companies such as the New York Times Co., which owns the money-losing Globe, should have the time and resources necessary to make the transition to an all- or mostly online business model. An unprofitable number-two tabloid such as the Herald, on the other hand, is really up against it.

It remains to be seen what is to become of CNC as well. The company — which owns mostly weeklies and a few dailies in Eastern Massachusetts, the most prominent of which is the Framingham-based MetroWest Daily News — is what might be called a second-generation chain. In the 1960s, ’70s and ’80s, scores of independent newspapers were gathered into regional groups such as North Shore Weeklies and the Harte-Hanks papers of MetroWest. Starting in the early ’90s, Fidelity Capital began acquiring these regional groups and combining them. Newer chains, such as the Newton-based Tab papers, were acquired as well.

Fidelity never seemed to figure out what to do with CNC, and it finally sold out to Purcell for a reported $150 million in 2001. Purcell lacked the resources to beef up CNC, and thus those papers continued to operate on a shoestring. Will life be any better under the new owner, the Illinois-based Liberty Group Publishing?

Hard to say. Mats Tolander (via Universal Hub) notes that Liberty Group — which will soon change its name to GateHouse Media — is itself owned by Fortress Investment Group, a New York City-based private-equity company that does not exactly appear to be dedicated to high-quality journalism.

There are a number of curious wrinkles to this deal. Here are three:

— Tolander links to an Editor & Publisher story from last Monday reporting that Liberty Group had acquired the New West papers, potentially bringing into the fold Michael Gartner, a former president of NBC News. Gartner won a Pulitzer Prize for editorial writing in 1997, when he was editor and co-owner of the Daily Tribune in Ames, Iowa. These days Gartner is the owner of the Iowa Cubs, so perhaps there’s not much chance of his moving to Massachusetts and whipping CNC into shape.

— As has been previously reported, the CEO of Liberty Group is Mike Reed, previously the CEO of the Alabama-based Community Newspaper Holdings Inc. (CNHI). According to this article in the Patriot Ledger of Quincy, Reed last year oversaw CNHI’s acquisition of the Eagle-Tribune newspapers — the Eagle-Tribune of Lawrence, the Salem News, the Daily News of Newburyport and the Gloucester Daily Times. Now Liberty Group, in addition to buying CNC, is also buying the Ledger, the Enterprise of Brockton and their affiliated weeklies. Who would be surprised if CNHI and Liberty Group attempted to combine their Massachusetts holdings? Not me.

— The chief executive of Enterprise NewsMedia (the Ledger, the Enterprise and their weeklies) is none other than Kirk Davis, who was chief executive of CNC in the late Fidelity/early Purcell era. Maybe I’m misreading the tea leaves, but it looks to me like Davis is poised to re-emerge in a big way.

I hope I’m proven wrong, but this all seems to be about money first, second and third, with journalism coming well down on the list of priorities. If nothing else, all this consolidation should serve as a further impetus to citizen-journalism projects such as Watertown’s H2otown and the Hopkinton News.

Interestingly enough, the person who comes out of this appearing to be the least interested in money is Pat Purcell. He sold his profitable company and kept his ailing urban tabloid, apparently for no reason other than passion. I’m not thrilled with the brand of journalism that the Herald often practices. But Purcell is right in arguing that Boston would be a lesser city with just one daily paper. Now we’ll see if getting out from under the debt he took on to buy CNC five years ago is the impetus he needs to reinvent the Herald yet again.

Mark Jurkowitz analyzes the sale here.

I’m running out the door in a few minutes, so just some random observations about the announced deal that will leave Pat Purcell in charge of the Boston Herald. (The Boston Globe covers the story here; the Herald here.)

— Whenever he’s met with the troops during the past few years, newsroom sources say that Purcell has always emphasized what a godsend his 100-paper Community Newspaper Co. chain has been in shoring up the Herald. Even though Purcell says the Herald will now be debt-free, how well can the Herald be expected to do as a standalone product? Or is another shoe going to drop?

— What kind of a steward will Liberty Group Publishing prove to be? The Illinois-based company is purchasing not just Purcell’s CNC chain but also the Enterprise of Brockton and the Patriot Ledger of Quincy — a deal valued at a total of about $400 million. This puts nearly all of Greater Boston’s medium and small newspapers in the hands of out-of-state corporations, including such well-known papers as the Sun of Lowell, the Eagle Tribune of Lawrence, the Standard-Times of New Bedford, the Salem News and the Telegram & Gazette of Worcester. (The T&G, as you may recall, is owned by the New York Times Co., which also owns the Boston Globe.)

— The Herald reports that Liberty Group is changing its name to GateHouse Media. How well-thought-out is that move? Click here, and you’ll see that there’s already a GateHouse Media in the U.K.

— What about the Internet? Purcell owns not two companies but three: the Herald, CNC and Herald Media, which is the parent company for both the Herald’s and CNC’s online presence. Neither the Herald nor the Globe today explain how that’s going to shake out, although a separate chart in the Globe’s print edition lists Purcell’s Town Online site as part of the deal. Whatever the case, unless the Web holdings are broken up, the site is going to host papers owned by different companies.

Shortly after signaling my intention to write more about Mark Jurkowitz’s departure from the Boston Phoenix — and from Boston — I realized I had written pretty much what I had wanted to say nearly a year ago, when it was announced that he would replace me as the Phoenix’s media columnist. You can read it here. Mark is a mentor and a friend, and he’ll be greatly missed. The Project for Excellence in Journalism is lucky to get him.

Nieman Reports has posted the contents of its spring issue, including my review of Danny Schechter’s book “The Death of Media: And the Fight to Save Democracy.” The book is an indictment of the “mediaocracy,” which Schechter defines as “a growing symbiotic relationship between increasingly interlocking media elites and their political counterparts … a political system tethered to a media system.”

Here’s an excerpt:

As Schechter observes, the cheerleading coverage of the war, especially on television, played out at a moment when the major corporations that own much of our media were seeking billions of dollars in deregulatory goodies from the Federal Communications Commission (FCC). That the FCC was then headed by Michael Powell, the son of President Bush’s first secretary of state, Colin Powell, only serves to underscore this grotesque conflict of interests. And though Congress and the courts ultimately revolted against Michael Powell’s proposed giveaway, the corporations were not left empty-handed. General Electric, the owner of NBC, which offered perhaps the most flag-waving war coverage among the Big Three networks, later received a $600 million federal contract to take part in the reconstruction of Iraq.

Schechter’s blogging from Copenhagen today. He’s also got an article in Nieman Reports on the credit crisis facing poor and middle-class Americans.

As many of you may already know, Mark Jurkowitz of the Boston Phoenix — my predecessor and successor as the paper’s media critic — is leaving to take a job as associate director of the Project for Excellence in Journalism. I spent most of the day at a conference and only learned about this late in the afternoon.

This is a huge blow not just for the Phoenix but for Boston. I’ll write more about this tomorrow. Meanwhile, read the Phoenix’s press release on Mark’s departure, and the Project for Excellence in Journalism’s announcement.

It’s time for Peter Sturges, the unelected executive director of the State Ethics Commission, to appear in public — say, before a legislative committee — and answer some questions.

As Kimberly Atkins reported in yesterday’s Boston Herald, Sturges wrote a column in his agency’s spring newsletter arguing that the Boston Globe got it wrong last month when it claimed that ludicrous new commission guidelines would prevent elected officials from discussing political matters at the State House, even at a news conference.

But the Globe’s Andrea Estes, who broke the original story, reports today that Sturges may merely backing down in the face of criticism. Estes writes:

The April advisory, reported by the Globe last month, angered many legislators, who said yesterday that they believe the Ethics Commission softened its stance in response to their concerns.

“They’ve heard feedback and decided we need to clarify our clarification,” said House minority leader Bradley Jones, a Republican from North Reading. “In an extremely political building like the State House, trying to take the politics out is impossible. Everyone I talked to read it and thought it was more than is now being represented. It’s an attempt to clarify the clarification for the purposes of assuaging the Legislature.”

So which is it? Todd Wallack writes to Media Nation that Sturges’ actual position may be somewhere in the middle — that he was indeed attempting to crack down on political speech, but not to the extent that the Globe originally reported.

In a word, this is ridiculous. An unelected official is attempting to regulate precisely how much free speech may be allowed on state-owned property. (The correct answer, of course, is all of it.) The Globe and the Herald are trying to nail him down, but he won’t talk. Someone should demand some answers.

Update: Atkins, writing on her blog, sends one over Estes’ bow. Does Estes have a blog? Hmmm … apparently not.