Eight top executives out at The Boston Globe since last summer. Boston Herald publisher Pat Purcell paying himself nearly $1 million in the past year as his paper was sliding into bankruptcy. It has been a significant week for the city’s two daily newspapers, and there’s some important context to both stories. So let’s try to tease out what’s really going on.
First the Globe. Last March, as I was finishing up my book on wealthy newspaper publishers, “The Return of the Moguls,” the Globe seemed to be well-positioned to make a legitimate run at financial sustainability. The strategy was a sound one: move the newsroom and business operations to the downtown and open a new printing facility in Taunton dedicated to producing the Globe as well as publications such as the Herald, The New York Times and USA Today.
As we know, the execution turned out to be disastrous. The Taunton plant simply couldn’t handle the work. All kinds of stories were floating around. Among the ones I heard was that management had failed to negotiate an agreement with the unions in a timely manner and that the presses lacked the needed capacity. Whatever it was, the situation quickly devolved into a rerun of the home-distribution fiasco of a year and a half earlier, except with fewer obvious options for fixing it. The story went public in a big way in September, when the Herald published an apology to its readers, putting the blame squarely on the Globe. From a personal point of view, I found myself frantically inserting material into my book about the printing problems during copy-editing and on page proofs.
What I’ve heard in the months since then is that the printing problems have eased but have not been entirely solved. It’s in that light that the eight departures ought to be evaluated, even if not all of them were related to the printing disaster and even if some of the blame was unfairly assigned. Globe publisher and owner John Henry told Don Seiffert of the Boston Business Journal this week that the changes were made in an attempt to change the culture of the Globe’s business operations.
“The culture of the Globe on the business side … needed to be reset,” Henry told Seiffert via email, adding: “The challenge and disappointment has been squarely with senior leadership. We’ve finally dealt with those issues. I am squarely responsible for not dealing with these issues in the first year.”
Fortunately, the Globe’s long-term strategy of selling expensive digital subscriptions is on track, with editor Brian McGrory recently writing that he expects the paper will cross the 100,000 mark during the first half of this year.
If I had one piece of advice for Henry, it would be this: No doubt the Taunton mess blew up whatever financial projections that had been made, delaying any visions of returning to profitability. But this would be the worst possible time to cut. At a moment when the digital strategy is working, it would make no sense to try to get readers to pay $30 a month for a shrinking product.
The signs are good: the Globe recently added a sixth journalist to its Washington bureau, and it is planning to hire replacements for Pulitzer Prize-winning art critic Sebastian Smee, who’s left for The Washington Post, and Statehouse reporter Jim O’Sullivan, who resigned amid accusations of sexual harassment. Slashing the newsroom because of Taunton’s problems would be the worst possible move.
The Herald today published some unsettling news about Pat Purcell, who has owned the paper since 1994 after previously running it for his mentor Rupert Murdoch. According to bankruptcy records obtained by reporter Brian Dowling, Purcell paid himself $970,000 in the year before he declared Chapter 11 on Dec. 8. Finance and operations executive Jeff Magram, a part-owner, was paid another $653,000. Four of Purcell’s children received more than $200,000 among them.
“I continued to pay myself what I was earning previously at News Corp.,” Purcell told Dowling, referring to the name of Murdoch’s company. “I took some raises, same as everyone else. When there were no raises, I took no raises.”
Globe columist Jeff Jacoby, a Herald alumnus, put it this way:
And no, of course Purcell didn’t take a vow of poverty when he bought the Herald. But as former Herald columnist Peter Lucas pointed out last Friday in his column for the Lowell Sun and the Fitchburg Sentinel & Enterprise, Murdoch practically gave Purcell the Herald and the South End property it was located on. Several years ago Purcell sold the property, which was redeveloped as the Ink Block high-end combination of condos, apartments, a hotel and a massive Whole Foods.
Now the money-losing Herald owes $31 million and the fate of employee pensions is up in the air. GateHouse Media, Purcell’s preferred buyer, proposes to shrink the number of employees from 240 to 175, although another possible buyer has emerged.
The Herald has gotten smaller and smaller over the years, and it seems reasonable that it was time for the Purcell era to end. But given how well he has done as a direct result of Murdoch’s largesse, I hope his employees’ worst fears aren’t realized when the bankruptcy proceedings are over and the paper is sold. He owes them much.