This just in

Globe and Herald squeeze as economy soars

by Dan Kennedy

With unemployment at a near-record low and the bull market continuing its unprecedented stampede, you'd think Boston's daily newspapers would be basking in the warm glow of prosperity.

You'd be wrong.

In a piece last week on the Herald's failure to send a representative to a minority job fair it was sponsoring ("This Just In," News, April 2), I omitted a salient fact. According to managing editor for news Andrew Gully, four of the last five cityside reporters who have been hired are African-American or Latino. Gully rightly complains that I should have included that piece of information.

In fact, both the Boston Globe and the Boston Herald have embarked on a series of budget-cutting moves. At the Herald, the belt-tightening has already affected news coverage: last week, plans to dispatch reporter Jules Crittenden and a photographer to the Balkans were canceled.

The two papers' situations are very different. The Herald, faced with a continuing drop in circulation despite unveiling a dramatic redesign and an expanded news hole last fall, is looking for roughly a 5 percent cut in its company-wide budget. Even with a reported 10 percent increase in advertising revenues, some newsroom insiders, speaking off the record, are clearly worried about the slide in the number of readers. The unanswered question: whether the redesign turned off long-time readers, or if the circulation drop would have been even worse had the Herald stuck with its skanky old look.

Circulation is on the decline at the Globe, too, but since the paper has a much larger base (it beats the Herald 470,800 to 271,400 on weekdays and 751,000 to 177,000 on Sundays), it can afford to treat that as a long-term project rather than an immediate crisis. The real problem at 135 Morrissey Boulevard is that the highly profitable paper isn't quite as profitable as its corporate owner, the New York Times Company, demands. The primary reason for this shortfall: a precipitate drop in revenues from help-wanted advertising, the result of a full-employment economy in which there are precious few job-seekers.

At One Herald Square, the budget-cutting has been greeted with a mix of resignation and grousing. When publisher Pat Purcell invested more than $20 million last year to buy color presses, launch a promotional campaign, and purchase the building from his mentor, former Herald owner Rupert Murdoch, it was seen as a sign that the Herald was here to stay (see "Hark, the New Herald," News, August 21, 1998). Now, staffers don't know what to think.

"There's a certain amount of logic to being cautious and doing a little retrenching at a time when expenses might seem to be flying out of control," says one insider. "On the other hand, if you're not making money in this economy you're pretty stupid." It has also not gone unnoticed that pieces said to be critical of two people who are key to the Herald's future were killed in recent weeks -- a Beth Healy column on BankBoston chief executive Chad Gifford and an Eric Convey article on a lawsuit involving Norwood auto magnate Ernie Boch. Gifford has been Purcell's financial angel since 1994, when Purcell bought the paper from Murdoch for an estimated $15 million to $20 million, mainly in borrowed money. Boch is one of the Herald's biggest advertisers.

Both Healy and Convey refused to comment, and Andy Costello, the paper's editor, is on vacation and could not be reached. But managing editor for news Andrew Gully asserts that any suggestion the pieces were killed for financial considerations is preposterous -- and he makes a reasonable case. The Gifford column, Gully says, would have hurt efforts to catch up with the Globe on the Fleet-BankBoston merger, a story on which the Herald was already lagging badly. The Boch article, Gully adds, was old news, and he decided to wait until there were some new developments to report.

As for the Herald's cost-cutting, Gully describes the process now under way as an annual spring ritual leading up to the new fiscal year, which begins on July 1. He calls the decision to cancel the Kosovo assignment a tough one, "because we wanted to go," but says it's ultimately more important that local coverage not be cut. As for whether the spending slowdown will affect hiring decisions, Gully says he'll know more in several weeks.

The Globe, too, is holding off on some hiring decisions, according to editor Matt Storin. The paper is also offering buyouts (early retirement packages) to about nine management employees, according to sources (in the newsroom, the only effect will be a net reduction of one editor), with the possibility of reductions in union personnel later on. Staffers have also been told to hold the line on overtime and expenses such as lunch with sources.

"I'm hopeful that it will not affect our operations in any way that readers would notice," says Storin. Certainly the paper's all-out commitment to covering the war in Yugoslavia -- it has three reporters and a photographer in the field -- is evidence that the Globe will continue to spend money on things that matter. But one source, voicing widespread resentment at the Times Company, characterized the cuts as the direct result of out-of-town ownership: "This is the price of being controlled by New York, and agreeing to unreasonably high profit goals." Adds another: "The undercurrent in the building is, Jesus, if we're having these sorts of cutbacks in good times, what's going to happen in bad times?"

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Dan Kennedy's work can be accessed from his Web site: http://www.shore.net/~dkennedy

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Dan Kennedy can be reached at dkennedy[a]phx.com

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Articles from July 24, 1997 & before can be accessed here

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