February 3 - 10, 2000
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Fidelity's last stand
Ten years on, the company's community newspapers are beset by layoffs, poor community relations, and poisonous morale. Can this empire be saved?
by Dan Kennedy
For the better part of a decade, Fidelity Capital -- a division of Fidelity Investments, the largest mutual-fund company in the world -- has been amassing a formidable media empire. Today, Fidelity's Community Newspaper Company dominates hometown coverage in Greater Boston and on Cape Cod, owning 88 weekly papers, one daily, 14 free "shoppers," and Town Online, a Web site that ties them all together. Its cumulative paid circulation of nearly 445,000 rivals that of the mighty Boston Globe, and it distributes another 429,000 papers for free.
But there's trouble in the provinces. After investing and losing millions of dollars, Community Newspaper Company, or CNC, is now intent on downsizing its way to profitability. Within the company, morale is poisonous and turnover is constant. And outside the castle walls, the peasants are revolting.
* In Arlington, CNC chose a peculiar way to mark the 125th anniversary of the Arlington Advocate: it shut the paper's office, which had been located across the street from town hall, and moved the operation to a regional facility in Lexington. That was in 1997. Then, last September, CNC moved the Advocate even farther away, to Woburn, and assigned an editor to put out both the Advocate and the Winchester Star. A couple of dozen outraged Arlington residents demanded -- and got -- a meeting with CNC officials, including editor-in-chief and vice-chairwoman Mary Jo Meisner. CNC retreated. The Advocate was moved back to Lexington, and was assigned its own editor once again. But Arlington state representative Jim Marzilli, who attended that meeting, remains disgusted. "The quality of the Arlington Advocate has been in decline for some time, especially since CNC took it over," he says. "Most previous owners of the Advocate were newspaper people who covered the news and sold advertising space as a means of supporting that. CNC has the equation turned around."
* In Marblehead, letters of protest started pouring in last September after one editor was assigned to put out the Marblehead Reporter, the Swampscott Reporter, and the Georgetown Record. The complaints -- and a spate of resignations, including that of a reporter who'd played the "town crier" in Marblehead's 350th-anniversary celebration -- forced management to back down. Today the Marblehead Reporter once again has its own editor and a two-person reporting staff, the town crier among them. "It looks like we may be able to restore the paper, because there has been such an outpouring of rage in this town," says Marblehead resident Linda Weltner, who writes the "At Home" column for the Boston Globe.
* On the North Shore, Faye Raynard and Anna Sobczynski quit CNC in 1997 after the company closed the Topsfield office of the Tri-Town Transcript, which covers Topsfield, Boxford, and Middleton, and moved the operation to its regional headquarters, in a Danvers office development. But Raynard and Sobczynski didn't just get mad; they got even. They started a free biweekly paper for the three towns, the Village Reporter, which today is sent to some 9700 households. And their office is right across the street from the local hangout, the Topsfield Bagel Company. "We have always had a love for the local news," says Raynard. "It was very difficult to cover the local communities from afar."
As these examples suggest, the bond between a community and its local newspaper is a vital one. There's nothing glamorous about the role that the hometown weekly or small daily plays: generally, it offers a recitation of selectmen's and school-committee meetings, obituaries and police logs, youth sports and the school-lunch menu. Yet the local paper transcends the sum of its parts. At its best, it's the common thread that makes it possible for members of a community to talk with each other, to govern themselves, to see their surroundings as something more than a place to sleep at the end of a long workday. The local paper can even be seen as more important than much larger news organizations. Take away the New York Times, and you've still got the Washington Post. Take away CNN, and you can switch to MSNBC. But take away the Watertown Tab & Press, or the Sudbury Town Crier, or the Hingham Journal, and a terrible void would be created. In essence, Fidelity holds an important public trust. And it's running out of time to prove that it's worthy of that trust.
Bill Wasserman, who used to own about a dozen North Shore weeklies that are now part of CNC, recently wrote to Fidelity chairman Ned Johnson to complain about what he sees as their declining quality. "I suppose it's not appropriate to share what's in the letters, but in general I would say I'm at best disappointed," says Wasserman. "The editorial quality of the newspapers is shameful." He is particularly critical of the practice, instituted last September (the reversals in Arlington and Marblehead notwithstanding), of having one editor handle two or three weeklies. "It's like having a minister in town who also serves three or four other churches," he says. The result, he adds, is that none of the papers has anyone who can write "quality editorials" on local issues or assign stories "with any sort of insight."
Wasserman's indictment is a harsh one. Not surprisingly, Mary Jo Meisner -- who'd been in touch with Wasserman after his missive to Johnson -- was angry when told of Wasserman's remarks. "I think those are incredibly hyperbolic statements that border on insulting," she says testily. "I think he's wrong. We put out some very fine newspapers that Bill used to own. I think some of them have improved."
Hyperbolic though Wasserman's statements may be, there is no question that CNC finds itself at a difficult and painful turning point. For years, CNC acquired papers and lost money without seeming to have anything in the way of a strategy or a vision. Presidents and editors came and went. According to a May 1998 article in the Wall Street Journal, Fidelity spent about $150 million buying its newspaper empire; CNC reportedly lost a combined $27 million to $28 million in 1995, '96, and '97.
Since then, the company has experienced something of a turnaround. Meisner, who'd overseen a nasty merger and downsizing as editor of the Milwaukee Journal Sentinel (the final casualty: her), arrived in 1997. In 1998 Kirk Davis, who'd won high marks for his management of CNC's Tab papers in Boston's western suburbs, became CNC's president and chief operating officer. Slowly, CNC's financial situation began to improve. Fidelity is a privately held company, and Davis declines to detail the bottom line. But he says CNC was profitable in 1998 and '99, and is headed for its "strongest year ever" in 2000.
Fidelity's community Newspaper Company owns 103 newspapers, mostly weeklies, all of them in Greater Boston or on Cape Cod. Formed 10 years ago to provide an alternative to the Boston Globe for advertisers looking to reach affluent suburbanites, CNC has seen its potential remain largely unfulfilled, despite reported profits in each of the past two years. Below, a look at Greater Boston's three biggest newspaper companies: Numerology
Community Newspaper Company
Owner: Fidelity Capital
Total circulation: 445,000 paid; 429,000 free
Daily circulation: Monday through Friday, 59,570; Sunday, 44,038 (comprises the MetroWest Daily News and its three regional editions)
Demographic profile: A survey of readers of all 103 papers shows that 56 percent of CNC readers are women; 47 percent are between the ages of 18 and 44, which is the age bracket most highly prized by advertisers; 34 percent are college graduates; and 53 percent have household incomes of $50,000 or more.The Boston Globe
Owner: New York Times Company
Circulation: Monday through Friday, 462,850; Sunday, 730,348
Demographic profile: According to a 1998 internal study of the daily paper conducted for the Globe, 53 percent of Globe readers are women; 55 percent are between the ages of 18 and 44; 29 percent are college graduates; and 55 percent have a household income of at least $50,000.The Boston Herald
Owner: Patrick Purcell
Circulation: Monday through Friday, 256,422; Sunday, 166,892
Demographic profile: Sixty percent of daily Herald readers are men, according to figures provided by the Herald; 58 percent are in the advertiser-friendly 18-to-44 age range; 22 percent are college graduates; and 50 percent have a household income of $50,000 or higher.
-- DKCirculation figures are from the Audit Bureau of Circulations.
The unanswered question is whether Davis and Meisner can transform CNC into the sort of newspaper company that can earn solid profits and at the same time fulfill its mission of putting out kick-ass local papers. In the midst of an economic boom, the emphasis continues to be not on growth but, rather, on making the company leaner -- and meaner. Thirty-seven people were laid off in January 1997. A number of unfilled jobs were eliminated following last September's reorganization. Then, last month, CNC terminated 73 employees, dumped 47 vacant jobs, and announced that another 30 positions would be gone by June 1.
"We're putting out worse papers than we were six months ago, a year ago," says a well-placed inside source. "The only vision right now has to do with the financial performance of this company. There is no editorial vision at all."
Kirk Davis knows what people are saying, and he attempts to walk a fine line: acknowledging that there's at least some legitimacy to the grousing while insisting that improvements are in the offing; pleading for a little more time while admitting that CNC has already had plenty of time to turn around its performance. Just 38 years old, a veteran of the Thomson and Ingersall chains, he evinces a passion about the newspaper business that contrasts with Fidelity's buttoned-down image. One of his first acts as president was to order that CNC's papers be displayed in the lobby of the paper's headquarters in Needham, thus eliminating the source of some hilarity: his predecessors' no-messy-newspapers policy, which had been mocked by both the Wall Street Journal and the Boston Globe.
Davis insists that the latest round of downsizing is not a sign of panic but is, rather, a well-planned-out final step toward rationalizing and integrating what was an incoherent company when he took its helm. Earlier in the decade, CNC acquired competing weeklies in a number of cities and towns, especially in the western suburbs. Today, those weeklies have been combined into one publication per town in all but one community, Cambridge, where the paid-circulation Chronicle and the free Tab continue to be published. (That led to an absurd situation after the November election. Because the arts-and-entertainment-oriented Tab came out before the Chronicle, the election results were published in the Tab -- and omitted from the Chronicle, which is supposed to be the news-heavy paper of record. Davis says he's well aware of the Cambridge problem, and that various possible solutions are being discussed.)
While acknowledging that it would be ideal to have an office in each town, Davis also says he's taken the difficult step of closing expensive and unnecessary facilities. For instance, 30 of last month's layoffs were associated with the shutdown of CNC's Marshfield production plant. Classified-ad operations have been centralized. And, last fall, CNC finally took the long-anticipated step of coming up with one size for all of its newspapers, a measure that advertising executives had been urging for years. The format is a slightly-narrower-than-normal broadsheet, a new industry standard that the Boston Globe will be switching to later this month. And never mind the jokes about broadsheets that carry the Tab name.
"We've had a very impressive turnaround, and that's to the credit of a lot of hardworking people," says Davis.
CNC was formed with the idea of creating a monolith that would be an advertising alternative to the Boston Globe, a way for advertisers to reach readers in the affluent suburbs without paying the Globe's high rates. But the company was built by acquiring smaller, regional chains that were, in some cases, already losing money when Fidelity bought them. And though CNC pays its editorial employees the entry-level salaries that are characteristic of community journalism (low to mid $20,000s for reporters at the weeklies, even after several years of experience), it invested heavily in the latest technology, built itself a fancy headquarters in Needham, and imposed a top-heavy management structure: a well-paid team at the peak of the corporate pyramid, plus managers at each of seven regional groups.
CNC's flagship is the Framingham-based MetroWest Daily News, formerly the Middlesex News. The News also publishes three regional editions that used to be stand-alone dailies: the Neponset Valley Daily News, formerly the Daily Transcript, which serves the Dedham-Norwood area; the Daily News Tribune, which covers Waltham and Newton; and the Milford Daily News. CNC's mainstay, though, is its weeklies, which include urban papers such as the Cambridge Chronicle, the Somerville Journal, the Brookline Tab, and the Allston-Brighton Tab, as well as dozens of tiny papers in tiny towns in Boston's suburbs and exurbs.
Give CNC this much: its papers are well designed. Some are so beautiful that you almost feel guilty tossing them into the recycling bin. A typical CNC paper does a pretty good job of covering town government and glomming onto feel-good feature stories about senior citizens and the local school system. But there's little enterprise reporting, and staffers tend to be young and inexperienced. As soon as they know their way around, they're gone -- to a better position within CNC, to another newspaper company, or out of journalism altogether. To be sure, these defects are characteristic of most community-newspaper chains. But CNC, with its over-centralized approach to local journalism -- exemplified by its new system of employing editors to sit in an office and put out two or three papers for communities they rarely have time to visit -- has taken a less-than-ideal situation and made it worse. Of course, several generations ago communities were at the mercy of local owner/editor/publishers who often put out wretched papers. But those eccentrics at least had a connection to their hometowns.
The question now is, where does CNC go from here? Its acquisition phase would appear to be over. The company lost out on a chance to buy the Worcester Telegram & Gazette last fall, when it was outbid by the New York Times Company, which also owns the Boston Globe. Kirk Davis says he wants to concentrate on improving the papers he's already got, building readership and advertising by putting out better papers. He and Mary Jo Meisner might start by treating their properties as individual newspapers, and not as interchangeable parts of a corporate puzzle. If anything, though, the trend toward centralization is likely to accelerate. Already, there are CNC reporters who write for both weeklies and dailies. Davis and Meisner say they want to increase the value of Town Online by having local reporters file more stories on the Web rather than be hamstrung by the weekly production schedule. That's a great idea, but are they committed to having a big enough news staff to do it properly? "We've got 400 people in news," Davis replies. But that hardly addresses whether that's enough for 103 papers, or whether they're being deployed in the right places.
One possibility that should be ruled out is that CNC will be sold in the immediate future. From the moment Fidelity started putting the company together, it has been beset by rumors that the newspapers would be sold as soon as Ned Johnson could find a buyer. Some insiders believe that a sale is on the immediate horizon, and perhaps they're right. But Davis, and other CNC officials before him, have been denying sale rumors on a regular basis since the early 1990s. Since then, the Boston Globe, the Boston Herald, the Worcester Telegram & Gazette, the Quincy Patriot Ledger, the Lowell Sun, and the Salem Evening News, to name just a few, have all been sold, yet CNC remains a wholly owned subsidiary of Fidelity. At some point, people ought to start taking CNC's denials seriously.
That's not to say there aren't partnerships or different ownership arrangements that might be contemplated. Both the Herald and CNC are now surrounded by the New York Times Company's Globe and T&G. The Herald's owner, Pat Purcell, told the Phoenix last fall that he'd like to find a way to do business with CNC, especially if Fidelity were willing to put some "equity" on the table (see "Cliffhanger," News and Features, November 12, 1999). Davis says he'd like to explore partnership opportunities with the Herald as well. An advertising alliance, even without a merger, would give the Herald and CNC a chance to compete as near-equals with the mighty Globe, much as the tabloid Chicago Sun-Times has acquired community weeklies in order to counter the strength of the dominant Chicago Tribune. More important, Purcell, a tough and resourceful publisher stuck with a feisty but shrinking city daily, would surely have some ideas of how to improve both CNC's journalism and its bottom line.
"I think Pat would do a bang-up job. I think he would be the single best guy to develop the inherent strength in that newspaper group," says Russel Pergament, a Wellesley businessman who sold the Tab papers to Fidelity in the early '90s.
Until or unless something like that happens, though, the future of CNC lies squarely on the shoulders of Kirk Davis and his principal news-side deputy, Mary Jo Meisner. The uncertainty and backbiting that have long defined the company appear to weigh heavily on them. Their two-pronged message: they want to put CNC on a solid financial footing, but they want to publish solid, respectable newspapers as well. Indeed, they say their decision to retreat from downsizing plans in Arlington and Marblehead is evidence of their good intentions. "You listen, you reassess," says Meisner.Adds Davis: "We want to have a successful company, but we also want to do the right thing."
Good intentions are one thing. Good results are quite another. Davis says his next step will be devoted to answering a few questions: "Can we make this a successful business? Can we eliminate this malaise about whether CNC can ever be a profitable company and get back to what we love, which is newspapering?"
The answers will determine whether Davis continues to run Community Newspaper Company. If he succeeds, then not only will Fidelity have developed a nice business for itself, but folks who live in Greater Boston or on Cape Cod will be well served. If he fails, then Fidelity ought to sell out to a company -- or companies -- that will break up the empire and get back to the unsexy but honorable business of community journalism.
Dan Kennedy can be reached at dkennedy[a]phx.com.
Dan Kennedy's work can be accessed from his Web site: http://www.shore.net/~dkennedy
Dan Kennedy can be reached at dkennedy[a]phx.com
Articles from July 24, 1997 & before can be accessed here
