Today, under Murdoch’s leadership, the losses of the Boston Herald (no longer American) have been drastically reduced, the paper’s circulation and ad linage have rebounded, and it’s been recast from a crime-and-grime-ridden scandal sheet into something of a serious, legitimate newspaper. Of all things. “They’ve gotten a little less yellow, thus a little more green,” is the way media buyer for a Boston ad agency puts it. (Translation: advertisers are more willing to see their display ads in this toned-down tab.)
“Our circulation is up year after year. Theirs [the Globe’s] is flat,” boasts Herald publisher Patrick Purcell. “Generally, we’re the ones that are on the move.”
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Now comes Murdoch’s move into broadcasting. His purchase of the seven TV stations and selling of Channel 5 to the Hearst Corporation not only bring Hearst back to the Hub, they also give the irrepressible Murdoch an astounding amount of cash to invest in his new programming venture. “If the Boston station had been sold separately the proceeds would have to be used to pay down Metromedia’s debt,” the Globe quoted a Murdoch honcho as saying. (In addition to the incredible $2 billion sale price of the stations, Murdoch and company have agreed to assume Metromedia’s equally incredible $1.3 billion in debts.) “This way we keep the money in the company to run it,” the honcho said.
And, boy, was Channel 5 overpriced this time. At a Channel 5 press conference last week, Hearst executive Bennack called $450 million “an appropriate value and price for the station.” Which shows you what he knows. It is far and away “the largest single-station broadcast transaction in history,” as Hearst’s press release pointed out with apparent pride. It sounded like an echo. Back in ’81 the same Channel 5 was sold by its proud local Boston owners, Boston Broadcasters Inc. (BBI), to media giant Metromedia for a gargantuan $220 million. That sum not only was far and away the largest ever shelled out for a TV station but also was said to be roughly three times the station’s worth. Such a price tag for a local TV outlet “will probably never be topped,” opined Herald American TV critic Monica Collins at the time. “One theory said that with the advent of cable and satellite television, the station would never be worth more than it is today,” offered the Globe’s Jack Thomas at the time.
Yes, that was one theory. “Obviously, these theories were in error,” says media analyst Bruce Thorp of the Washington research firm Lynch, Jones and Ryan. “I don’t know that there’s any real explanation,” Thorp says. “The new FCC rules allow one company to own as many as 12 stations [as opposed to the seven allowed by the old rules], and that may be bringing more buyers into the market.” Which in turn may be bringing media prices up. But the more current theory has it that media takeovers, buy-out hysteria, and, consequently, media prices peaked with the friendly takeover of ABC (a major network) by Capitol Cities Broadcasting (a chain or minor TV independents), the hostile takeover attempt by stockholders of Storer Broadcasting (which owns Boston’s Channel 38), and the equally hostile bid by would-be media magnate Ted Turner to take over CBS.
