Media

Making sense of the Herald's suburban push

by Dan Kennedy

UNITED FRONT: CNC president Kirk Davis (top) and Herald publisher Pat Purcell will be working closely together.

In an interview last winter, Kirk Davis, the president and chief operating officer of what is still Fidelity's Community Newspaper Company, came across as someone who cares passionately about newspapers -- and who might genuinely be able to make a difference if he ever had the chance to work for people who shared that passion.

It looks as if Davis is going to get that chance. Last Thursday, Boston Herald publisher Pat Purcell agreed to buy CNC for an undisclosed amount of money, thus combining his strong city franchise with a wide-ranging suburban empire. In a conference call with reporters, Purcell said he's keeping Davis -- and a well-placed Herald source says that, privately, Purcell has spoken highly of him.

Purcell and Davis are going to need every bit of passion they can muster -- not to mention smarts, creativity, and toughness. Although it became modestly profitable during the past few years, CNC has cost Fidelity Capital tens of millions of dollars over the past decade. Now the new owner is going to have to try to solve a problem that Fidelity has wrestled with inconclusively for years.

Comprising more than 100 newspapers (88 weeklies, four dailies, and 15 freebie "shoppers") in Greater Boston and on Cape Cod, CNC isn't so much a business as an idea. And the idea -- that a large cluster of community newspapers can make more money collectively than they could individually, through efficiencies of scale and through joint advertising buys -- has not proven true, at least not in Massachusetts. (Not that there aren't models. The tabloid Chicago Sun-Times has turned itself into a profitable alternative to the mighty Chicago Tribune in recent years through its acquisition of suburban papers.)

The shorthand version of last week's news -- that Purcell had extended his reach into the suburbs, and had thus made himself competitive with the Boston Globe -- isn't really true either, at least not yet. Rather, Purcell will soon find himself the head of two companies that do entirely different things. His and Davis's challenge is to meld those companies together without damaging either what makes the Herald unique or the individual identities of scores of small suburban papers. On the plus side, Purcell rides into CNC on an enormous wave of good will, which will give him the freedom to close and/or combine papers and integrate them with his Herald operation without too much sniping from the troops. On the minus side, he can't reverse the downsizing that's taken place at CNC over the past few years -- downsizing that has drawn heated criticism from community leaders as well as from staff members -- without risking a new gusher of red ink.

Then there's the matter of what kind of debt Purcell is taking on. The Globe and the Herald, citing reports of what other companies had offered Fidelity, have speculated that Purcell may be paying as much as $100 million to $150 million -- a far cry from the $15 million to $20 million he paid for the Herald itself just a few years ago. Given CNC's uncertain profitability, that seems absurdly high. But if it's true, then Purcell comes into this with a heavy weight on his shoulders.

All of this is not to suggest that Purcell made a bad deal. In fact, he made a great deal, and if he plays his cards right, he's ensured the survival of both the Herald and CNC. Through his stewardship of the Herald, Purcell has proven himself to be a resourceful newspaperman. But there's no question he faces enormous challenges if he's going to make this work.

Purcell's move comes at a time when the newspaper market in eastern Massachusetts is rapidly changing. Just a few weeks ago, the owners of the Quincy Patriot Ledger, the Brockton Enterprise, and a string of South Shore weeklies pulled those papers off the market. Both Purcell and CNC had been interested in buying them, although CNC had taken itself out of the running about a month earlier. The Herald and CNC also face new threats in the suburbs: the Globe is expanding to its west, overlapping with the coverage area of the Worcester Telegram & Gazette -- which, like the Globe, is owned by the New York Times Company. It would seem that the collapse of the Ledger deal, combined with the Globe's new aggressiveness in the western suburbs (home to CNC's strongest papers, including its flagship, the MetroWest Daily News), drove Purcell and Fidelity into each other's arms.

Davis declined to be interviewed for this article. Purcell, during last week's conference call, would not discuss what changes he might make at CNC. "It's too early to discuss the impact on staff," he said. "We need to get in there and understand the operation better."

There's no question that Purcell has pulled off the coup of his career. But as the old cliché goes, now comes the hard part.

On the Web

During the past year, the Phoenix has published three articles that offer background information helpful in understanding the Herald-CNC deal. Those articles are listed below.

In an article last November 12 ("Cliffhanger," News and Features), the Phoenix explored business and financial challenges facing the Herald -- including how the Herald might find a way to combine some or all of its operations with those of CNC.

On February 4, the Phoenix reported on the poor morale and difficult community relations caused by CNC's repeated rounds of downsizing ("Fidelity's Last Stand," News and Features).

And last week's issue, dated September 29, explored the Boston Globe's redesign and expansion into the western suburbs, a move that puts particular pressure on CNC's strongest papers ("Behind the Face Lift," News and Features).