Cliffhanger

The Boston Herald is better than ever, and publisher Pat Purcell says it's profitable and financially secure. So why is circulation falling like a rock? And -- more important -- what can Purcell do to keep his paper alive?

by Dan Kennedy

Patrick J. Purcell, the owner of the Boston Herald, is certainly not the first newspaper publisher to issue a public apology. But he may be among the very few to seek forgiveness because his presses burst into flames.

It happened on Monday, October 18, at about 4 a.m., deep within the bowels of the Herald's dilapidated, four-decade-old plant off the Southeast Expressway. The press crew, hurrying to get the day's paper out the door and into convenience stores, train stations, and street boxes in time for the morning commute, pushed the ancient machinery hard -- too hard. Two of the five units ignited paper dust. The fire was quickly doused, but the press run had to be finished on just three units. The paper got out hours late, and some home deliveries had to be canceled altogether.

Purcell issued his apology in a brief page-five item the next day, and assured Herald readers that "the problem has been corrected." But it wasn't the first time that Purcell's outdated presses have caught fire, and in all likelihood it won't be the last time, either.

The Herald's amazing burning presses may be the most spectacular problem Purcell faces more than five years after buying the paper from media baron Rupert Murdoch, his mentor and former employer. But it's not the only problem, and, in fact, it doesn't come close to being his most intractable one.

Purcell's biggest problem by far is that the Herald's circulation has been in free fall for the past 10 years. At a time when newspaper readership is in decline across the country, the Herald's circulation is falling much faster than the national average -- and much faster than that of its bigger rival, the Boston Globe. Worse, the Herald's drop has only accelerated in the year since the paper unveiled a dramatic full-color redesign.

Purcell calmly but firmly disputes any notion that his paper -- the largest independently owned daily in New England -- is in trouble. The Herald's already solid profits will be up 50 percent this year, he says, and ad revenues will increase by about 10 percent for the second year in a row. (The Herald, like the Phoenix, is a privately held company, and therefore it does not file any publicly available financial statements.)

"Any rumors of our financial condition other than being very strong are false," says Purcell, following a tour of his printing, inserting, and distribution operations in which he displays such an intricate knowledge of the equipment that you suspect he could operate it himself.

The thing is, though, that the economy has been humming pretty much throughout the Purcell era, and has been spectacular the past couple of years. It would be surprising if the Herald weren't making money. The real issue for Purcell is not his paper's financial performance this year, but, rather, its long-term future. That's a dicey proposition given that, inevitably, another recession will come -- and that, this time, Rupert Murdoch won't be there to bail the paper out.

"In an economic downturn, and there will be one, advertising dollars get tight, and advertisers leave the number-two buy and stay with the number-one buy," says a national newspaper-company executive, speaking on a not-for-attribution basis. "The second paper is the first to go off the schedule. It is difficult for a second paper to make it through an economic downturn."

Indeed, Purcell himself hints that he knows he can't continue his solo act forever. The real question is not whether the Herald can survive as an independent newspaper, but whether Purcell can grow his company and extend the Herald franchise in ways that ensure its financial well-being. It's something he's given a lot of thought to. He's made several attempts to acquire other local newspapers, and freely admits he'd like to find a way to do business with Fidelity's 100-plus community newspapers in Greater Boston and on Cape Cod. He makes no secret of his desire to go into the broadcasting business if federal regulations that prohibit daily newspapers from owning television and radio stations are eased -- and that could happen as early as next year.

Five or 10 years from now, the Herald might be history -- or it might have reinvented itself as a content provider for a variety of local print, broadcast, and online media, with the Herald itself as the hub. It is a vision devoutly to be wished for. Boston would be a far poorer community if it became a one-newspaper town. Not only does the Herald keep the Globe on its competitive toes, but the Herald itself is an essential part of the city's fabric: a loud, feisty urban voice to which attention must be paid.

Purcell himself is a civic asset as well. Active in Catholic and other charitable organizations, Purcell is the most visible publishing executive in the city -- far more so than the Globe's new publisher, Richard Gilman, dispatched from New York Times Company headquarters last summer, or Gilman's predecessor, Benjamin Taylor.

Difficult as Purcell's challenge may be, it would be unwise to bet against him. As Murdoch's handpicked publisher for much of the 1980s, he turned the Herald -- against all expectations -- into a profitable newspaper. As the proprietor, he has steered his paper with a steady hand, building revenues even as circulation has continued to decline.

Says Michael Goldman, a Democratic political consultant and radio talk-show host: "If I had a nickel for every story about the imminent demise of the Herald, I'd be a wealthy man. They survive."

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If the Herald sucked, Purcell's job might be easier. He could fire the editor. He could hire more-aggressive reporters. He could order up a redesign. In fact, he's done all those things. Yet circulation continues to fall. Certainly that's not because of any obvious flaws in the editorial product. There may have been times when the Herald was a little bit better than it is now; and there surely have been times when it was worse. But, essentially, the Herald today is a pretty damn good paper.

Let's acknowledge, too, that last year's redesign was a success. Yes, some argue that it damaged the paper's appeal by selling out its tabloid soul. But that argument is ridiculous. The color looks great, the type is more readable, and the front page still screams when the situation warrants. And, as managing editor for news Andrew Gully puts it, the new Herald passes the "coffee-table test" -- people no longer feel compelled to hide it in front of others.

Hey, Pat! Here's how to make the Herald a better paper Don't blame the newsroom for the Boston Herald's vertigo-inducing plunge in circulation. The paper today is about as good as it's been at any time in its 17-year history, and it looks better than ever. But that doesn't mean that the Herald couldn't improve. Here are five ideas that could help it become a stronger competitor to the Boston Globe. * Express yourself. The city needs a credible conservative alternative to the Globe's mostly liberal editorial and op-ed pages. Unfortunately, the Herald isn't it. The paper's opinion pages should be expanded from two to four, which would add up to the same amount of real estate that's offered in the broadsheet Globe. Wayne Woodlief's political column and editorial-page editor Shelly Cohen's column are both thoughtful and worthwhile. But Beverly Beckham's lifestyle column should be moved to the lifestyle pages, where it would be a better fit, and Don Feder's offensive right-wing rants should be moved, say, right next to Chico the Llama in Ernie Boch's car ad. The extra editorial space should be devoted to an expanded letters-to-the-editor section, slightly longer (and smarter) editorials, more guest op-eds, an improved roster of syndicated columnists, and a few new, locally based conservatives who can write intelligently about state and city issues. * Embrace the city. Try as it might, the Herald is not going to break the Globe's stranglehold on the affluent suburbs. As the city paper, the Herald should plunge into city coverage even more than it does now. How? By providing the kind of routine coverage of City Hall that used to be -- well, routine. And by covering the Boston public schools like its readers' lives depend on it. Which, in fact, they do, to a far greater extent than is the case with folks whose Globe is plopped on their suburban doorsteps every morning. * Rainbow coalition. The Herald solved one color problem with the purchase of new presses last year. Now it's time to solve the other color problem: a lack of diversity on staff. Talented minority journalists are in demand, making it hard for the Herald, with its low salaries and low cachet, to bring them in and to keep the ones they have. Still, the paper needs to redouble its efforts to reach out to its already substantial minority readership. Two visible moves it could make would be to add a minority columnist (something it's lacked since Leonard Greene left several years ago) and a minority editor who's near enough to the top of the masthead to have a real effect on the coverage. * Saturday-morning fever. The light-selling Sunday paper should be turned into a weekend edition, available on Saturday mornings. (To maintain its status as a seven-day operation, the Herald could continue to put out a small paper on Sunday.) This idea has been floating around for years, and it would have had more of an impact before the Globe started selling a bulldog edition of its Sunday paper on Saturday afternoons. Still, switching to Saturdays would be a step worth taking. The Sunday Herald isn't exactly a gripping read, but there's an occasional good feature, the pull-out sports section is a winner, and the comics and TV magazine are both better than the Globe's. * Stay local -- no matter what. What readers like about the Herald is its focus on local news. Yet, when a big national or international story occurs, the editors' instincts are to cut back on local coverage and go with what's hot. Take last week's crash of EgyptAir Flight 990. On November 1, the day after the crash, most of the front page was devoted to the crash, beneath the stark headline NIGHTMARE. Nothing wrong with that. But the Herald also gave over approximately 11 inside pages to the crash, when three or four would have been plenty. That thud you heard was the sound of thousands of Heralds being tossed into the recycling bin 10 minutes after being purchased.

Despite these successes, the Herald has had, in some respects, a rough year. A five percent budget cut was ordered during the spring; hiring was frozen over the summer and only now are vacancies being filled. Plans to send a reporter and a photographer to Kosovo were canceled at the height of the war. Some of the paper's most experienced reporters, such as Carolyn Ryan, Anne Donlan, Ralph Ranalli, Mark Mueller, Darrell Pressley, and Beverly Ford, left, some for better-paying jobs at bigger papers (the Globe, in several cases), some just because they were sick of the long hours and low pay -- relative to the Globe. Veteran Herald reporters' salaries are in the mid $40,000s. Globe reporters with the same level of experience earn salaries in the mid $60,000s, with better medical and other benefits.

Managing editor for features Kevin Convey attributes the belt-tightening to lost revenues from the unanticipated circulation drop, and to expectations that the economy would go soft in the third quarter. As the economy continued to rock along, the financial reins were eased. In the past few months Herald staffers have reported from the Balkans and from Indonesia. A full complement, and then some, was dispatched to Yankee Stadium during the baseball playoffs. Perhaps the most telling sign that the Herald's finances have improved is that Purcell is bragging about his high profits just as contract negotiations with the Newspaper Guild are getting under way, a circumstance that normally prompts owners to warn portentously of dark days to come. "Obviously we're thrilled and delighted that the paper is prospering, and we're looking forward to getting a share of that prosperity," says reporter Tom Mashberg, chairman of the Guild's editorial unit.

If you discount the financial pressures the paper was under during the first half of the year, then the Herald has had a hell of a 1999. It's published more than 500 pages beyond what had been budgeted, going all-out on big local events such as the All-Star Game and the Ryder Cup and on big news stories such as the crash of John Kennedy's plane and the shootings at Columbine High School. It scored the local political-reporting coup of the year, following the good ship Nauticus out onto Boston Harbor just in time to be flashed by Gidget Churchill, thus launching Peter Blute's radio career. And the paper is highly competitive with the Globe on breaking news, local politics, and business, beating its larger rival on a regular basis. (To be sure, the Globe beats the Herald on many local stories, too.) The Herald also has not been afraid to beat up on Red Sox president John Harrington's management of the team, which is supposed to be a charitable trust. Indeed, the Herald's rough treatment led to a highly speculative Steve Bailey column in the Globe that Purcell himself may want to be part of a deal to build a new ballpark at the CrossTown site adjacent to the Southeast Expressway-- speculation that Purcell calls "preposterous."

The trouble is that the Herald operates in the shadow of a very good paper. Much as Bostonians love to complain about the often staid paper of record, it remains one of the best papers in the country -- sixth-best, according to a new Columbia Journalism Review survey. The Herald would be the best paper in San Francisco or Houston, to name just two cities served by mediocre dailies. But it's not the best paper in Boston, nor is it likely ever to be.

That competitive disadvantage has taken an enormous toll. According to the Audit Bureau of Circulations (ABC), the Herald's weekday circulation dropped from 360,000 to 256,000, or 29 percent, between 1989 and 1999. On Sundays, circulation has fallen from 252,000 to 167,000, or 34 percent. Worse, the Herald actually lost 15,000 weekday readers and 10,000 Sunday readers in the year after the redesign was unveiled.

By contrast, the Globe -- far bigger to begin with -- is bleeding readers at a much slower rate. Weekday circulation, according to ABC, is now 463,000, down 11 percent from a 10-year high of 519,000, reached in 1991. Sunday circulation is 730,000, down 10 percent from a peak of 815,000 in 1994. Though this decline isn't nearly as dramatic as the Herald's, Globe managers are worried enough to have recently introduced an early "bulldog" edition of the Sunday paper on Saturday afternoons, and to deliver free Thursday papers to Sunday subscribers who don't take the weekday Globe.

According to national figures, the Globe's problems parallel the industry's, whereas the Herald's are simply off the charts. Weekday newspaper circulation fell from 62.6 million to 56.7 million, or a little more than nine percent, between 1989 and 1997, the most recent year for which figures are available, according to the trade magazine Editor & Publisher. Sunday circulation fell from a high of 62.6 million in 1990 to 60.5 million in 1997 -- a drop of about 3.4 percent.

The Herald is now fighting to regain circulation through both a change in the news mix and tried-and-true promotional tactics. Examples of the latter include the front-page "Lucky Numbers" lottery-style game, the latest incarnation of Murdoch's old Wingo, and the 35-cent price that street hawkers have been charging for the 50-cent paper this fall.

More significant, the soft features that had gained a foothold on the front page have been reduced in number. You'll still find some arts and lifestyle stories on the front, but the emphasis is on the paper's traditional strengths: breaking news, politics, and sports. Pages two and three, given over to features and to columns on topics such as commuting, health, education, and consumerism under the redesign, were dumped overboard during the summer in favor of hard news, although they still appear, irregularly, elsewhere in the paper. The change reflects, at best, unusually quick rethinking; at worst, panic. Pages two and three were supposed to be the showcase for what the new Herald was about: news you can use, plus good writing and photography not necessarily tied to the latest plane crash or political outrage. Now those pages bellow once again like the Herald of old. (Dropping the features on pages two and three has also made it easier for the Herald to cut costs by putting out smaller editions on slow news days.)

Even the brash one- and two-word front-page headlines, banished with the redesign, have been brought back in modified form. Sometimes they're inspired, such as LAST HARRUMPH, to mark Boston city councilor Dapper O'Neil's re-election loss. Sometimes they're merely obvious, such as HORRENDOUS, over a story about the brutal murder of pregnant 14-year-old Chauntae Renee Jones.

According to editor Andy Costello, weekday circulation has been goosed back up to 271,000. Will the gain hold? Time -- and ABC -- will tell.

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The one place where the Herald is neck and neck with the Globe is in the city itself -- and that's a dubious advantage, given long-term demographic trends. Until the past few years the Herald actually outsold the Globe in Suffolk County, which comprises Boston and the core urban communities of Chelsea, Revere, and Winthrop. But that's no longer true. According to ABC, the Globe now edges out the Herald by 71,000 to 65,000 in Suffolk County. (Even that close margin may be an artifact: the Globe is mostly home-delivered, whereas the Herald depends overwhelmingly on newsstand sales. The Herald's high numbers in the city may be a result of suburban Globe subscribers' grabbing a Herald once they arrive in town.) More significant is the fact that the Herald's core audience -- working-class and middle-class families who live in Boston's neighborhoods -- are the very people who are continuing to move out, even as high-income young professionals (i.e., the kind of people who are more likely to read the New York Times or the Wall Street Journal than either Boston paper) move in.

According to federal Census data compiled by the Boston Redevelopment Authority, the population in Boston fell from about 801,000 in 1950 to 574,000 in 1990. By some estimates, the population had fallen another 10,000 by 1995. Much of the drop can be attributed to the disappearance of blue-collar families, who moved to the South Shore, the North Shore, and the western suburbs. "Basically, the center of the city has gone from working-class ethnic whites to predominantly black and poor minorities, from Columbus Ave in the South End all the way down to Mattapan," says political and demographic consultant Tom Driscoll. And though the Herald sells reasonably well among African-Americans (as opposed to non-English-speaking black immigrants), most of the time it still has the look and feel of a paper designed for white city-dwellers.

Former Boston city councilor Michael McCormack, now a downtown lawyer, recalls campaigning outside MBTA stops in the early 1980s. "Early in the morning, the blue-collar crowd was reading the Boston Herald," McCormack says. "Then, when you'd start to see the white-collar people getting on board, it was the Boston Globe." That's still true, except that there are a lot fewer blue-collar workers than there used to be. And though the Herald has changed considerably with the times, its audience remains significantly more blue-collar -- less affluent, less educated -- than the Globe's.

At root, the Herald's biggest obstacle in solving its circulation problem is that it's a second read for people who aren't necessarily looking for a second read -- or who, after slogging through the Globe, are more likely to scan the Times or the Journal than pick up a Herald.

Take Jack Beatty, a senior editor at the Atlantic Monthly and author of a biography of James Michael Curley. Recently he came across a copy of the Herald on the train in from Concord -- the first time he'd seen the paper in about three years. "I read practically every page of the paper," he says. "It was so readable -- they knew what was interesting, they gave it the right amount of space. I read it from stem to stern. As far as I'm concerned, it does what it does terrifically."

So has Jack Beatty become a regular Herald reader? Well, as a matter of fact -- no.

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Since it is exceedingly unlikely that Pat Purcell is going to start selling more copies of the Herald in significant numbers, what he must concentrate on is extending his franchise. He knows it. But there's no telling whether the right opportunities will come along -- or whether he'll be in a position to take advantage of them if they do.

The Herald has already expanded to the Internet. But that makes Purcell no different from any other newspaper publisher -- and, though the Herald has started selling ads on its Web site, the Net is just as much a losing proposition for Purcell as it is for everyone else. In general, the Web is not exactly a promising medium for the Herald. For one thing, it finds itself once again competing with the Globe -- a wholly owned subsidiary of the New York Times Company, whose chairman, Arthur Sulzberger Jr., has made the Internet a key part of his company's future. Also working against Purcell is the fact that the Herald is a quick hit, and it's hard to see the online version of the Herald developing the kind of "stickiness" needed to keep surfers locked in and advertisers happy. The Herald's Jobfind.com site gets high marks for design and ease of use, but the Sunday Globe's help-wanted section is the premier job-hunting resource in New England -- and is online, in searchable form, at the Globe's Boston.com site. And both the Herald's and the Globe's online job sites are being heavily challenged by a number of Web-only services.

Purcell himself seems less than thrilled by the brave new online world, figuring that many of the 35,000 to 40,000 people who read the Herald on the Web might otherwise be plunking down 50 cents. He says he's even discussed taking all or part of it down or charging for access, but has decided that it makes no sense to defy "customer preference."

It would appear that media other than the Internet represent a more promising opportunity for Purcell. And, in fact, this is where he has been the most active. So far, though, he's come up with nothing but zeroes.

In the mid '90s, Purcell tried and failed to buy the Lowell Sun, which went to William Dean Singleton's MediaNews Group, and the Brockton Enterprise, which went to veteran newspaper executive Jim Plugh, backed by New York-based investors. But those potential acquisitions were small feed compared to the Quincy Patriot Ledger, which went on the block in 1997. With a circulation of about 80,000 on weekdays and 100,000 for its Saturday weekend edition, the Ledger was (and is) a powerhouse in its own right. As an evening paper, the Ledger fit perfectly with Purcell's publishing schedule: he could print it when his presses weren't being used for the morning Herald. With visions of synergy dancing in his head, Purcell jumped into the fray -- only to see Plugh's group scoop it up for a reported $90 million. (Sources say that Purcell had concluded it was worth no more than $75 million.)

There's been little acquisition talk since then, but that could change. The Times Company's $295 million purchase of the Worcester Telegram & Gazette, and its announced strategy of a joint business and advertising operation with the Globe (see "Don't Quote Me," News and Features, October 22), has created a regional behemoth that threatens no one so much as Fidelity's Community Newspaper Company (CNC), which Purcell has, in the past, expressed an interest in acquiring. CNC publishes more than 100 newspapers, most of them weeklies, in the Boston suburbs and on Cape Cod. Its flagship, the MetroWest Daily News, is based in Framingham, just a quick drive down the Mass Pike from Worcester. CNC made an unsuccessful bid to buy the T&G; now it faces the prospect of direct battle with the mighty Times Company.

"I think it's going to change the competitive landscape considerably," says Kirk Davis, CNC's president and chief operating officer. "If you can put together an extraordinary combination of media like that, then I guess there are no ground rules about media consolidation. That is about as significant a combination as I can imagine."

It could also drive together CNC and the Herald. Certainly an alliance would make good business sense. John Morton, whose Maryland-based Morton Research firm analyzes newspaper-industry finances, says Chicago's number-two paper, the Sun-Times, has revitalized itself in recent years by acquiring 70 papers, mostly weeklies, in Chicago's affluent suburbs. Advertisers like it because they can, with one phone call, place an ad that will be seen in the city and in the suburbs, making it an affordable alternative to the dominant Chicago Tribune. The Justice Department tends not to raise anti-trust objections when it involves the number-two paper, Morton adds, because such combinations help keep the paper alive and thus enhance competition.

The question is how a Herald-CNC deal would be structured. Davis says emphatically that CNC is not for sale, and that, after reportedly losing millions of dollars over the past decade, the company is now firmly in the black. Purcell isn't about to sell the Herald, either. Davis says he'd be open to a joint advertising arrangement with the Herald, but Purcell says he's not interested. In fact, he's looking for a lot more. Purcell, who normally plays his cards close to the vest, is unusually candid in discussing how he might get what he wants. Eventually, he says, the T&G-Globe combination may put so much pressure on CNC that Fidelity might seek a combination with the Herald, and be willing to put some money on the table to make it happen.

"If there was some sort of equity relationship, it might make sense," says Purcell with a thin-lipped smile.

Finally, there is at least the theoretical possibility that Purcell could expand into radio and television -- something that federal law prohibits him from doing now, but that might become possible in the future. Currently, cross-ownership regulations prohibit publishers of daily newspapers from owning TV or radio stations. But the Newspaper Association of America, a trade group, is pressuring Congress and the Federal Communications Commission to relax that ban. According to a congressional source, the FCC is likely to act, perhaps as soon as next year. With media corporations now allowed to own multiple radio and TV stations in a given market, this source says, "the newspaper publishers are making the case that the cross-ownership ban is just unfair."

The Herald recently editorialized against the cross-ownership rules. As for Purcell's own intentions, he says somewhat cryptically, "I think there will be some opportunities for us to do some things as a content provider as business conditions change."

Interestingly enough, the Boston media scene has been continuously reshaped by the cross-ownership rule. In the 1950s the Herald Traveler won the right to operate a TV station and a radio station -- in part, according to J. Anthony Lukas's Common Ground (1985), because Joseph Kennedy had promised the paper's owner, Robert Choate, an FCC exemption if Choate would vote for a Pulitzer for his son John F. Kennedy's book Profiles in Courage. The Globe fought against that exemption for years, and eventually prevailed. That led to Hearst's Record American acquiring the Herald Traveler in 1973. The newly christened Herald American staggered along until 1982, when Murdoch rescued it from near death and shortened the name to the Herald. The next threat came in 1987, when Murdoch bought WFXT-TV (Channel 25), and Senator Ted Kennedy -- a frequent Murdoch target -- leaned on the FCC not to grant Murdoch an exemption that would enable him to keep the Herald. Murdoch sold Channel 25 to the Boston Celtics; in 1994 he repurchased Channel 25 and sold the Herald to Purcell.

The cross-ownership prohibitions were put in place to prevent monopolistic practices that would harm advertisers and stifle creativity. But the world has changed. If it's all right for a handful of media conglomerates to control networks, cable systems, and TV and radio outlets across the country, then how can it be wrong to allow someone like Purcell, with a demonstrated commitment to the community, to expand his business in ways that would keep the Herald thriving?

Tom Rosenstiel, director of the Project for Excellence in Journalism, is no fan of monopolistic media. But even he says that allowing a newspaper to own a TV and/or radio station in the city where it's located may turn out to be a worthwhile reform.

"At a time when it's not clear whether newspapers are going to continue to reach an entire community, it's worth thinking about whether it makes sense to allow a news company that produces a newspaper to also own a TV station and a radio station in that community so that the news reporting can reach a broader audience in that market," says Rosenstiel.

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One thing Pat Purcell definitely wants you to know is this: he's not going anywhere. Some observers wonder whether he might sell the Herald's property, which is located at the potentially lucrative crossroads of the rebuilt Southeast Expressway and the Mass Pike. Purcell acquired the six-acre property from Murdoch two years ago; at the time of the original 1994 deal, Purcell got the paper, but Murdoch held on to the land.

The idea, sources say, is that Purcell could sell the land for a premium and move the paper to a cheaper location. But Purcell says that's not going to happen. The property's currently assessed at $10.5 million. A new facility, he explains, could cost as much as $100 million.

To be sure, Purcell faces some daunting challenges. But as he contemplates his next move, he finds himself in a position of greater strength than some might suppose. Color ads have come in at twice the rate he had projected since adding color a year ago, he says; the color press he bought last year will be paid off by next June. Now Purcell's getting ready to sink more money into his operation: another $10 million color press that will allow him to print the paper faster, thus giving reporters more time to file and drivers more time to deliver the product. Presumably all without anything catching on fire.

Perhaps most important, Purcell claims his debt is negligible. That's a contention that would have been met with skepticism when he paid Murdoch an estimated $15 million to $20 million to buy the Herald back in 1994. After all, Purcell was not a wealthy man, and he was thought to have been able to pull off the deal mainly through the good graces of BankBoston. But with smaller newspapers such as the Worcester Telegram & Gazette selling for 10 to 15 times that, Purcell's purchase of the Herald now looks like a bargain. (Granted, the T&G is a high-margin paper that, unlike the Herald, controls a monopoly market.) That's an important consideration as he contemplates his next move. BankBoston has since been merged with Fleet Bank, and Purcell is thought to have a closer relationship with BankBoston CEO Chad Gifford than with Fleet's top banker, Terry Murray. Getting the capital and credit he needs is always going to be a challenge for him -- which is, no doubt, the reason he muses about the possibility that Fidelity would pay for the privilege of doing business with him, and why some observers still speculate that Rupert Murdoch still hovers off-stage, ready to write his old friend a check to help him with the right deal.

The Herald is swimming against an inexorable tide that has swept away the number-two newspaper in city after city during the past 30 years. Today there are fewer than a half-dozen cities in the US where there are two truly competitive newspapers -- that is, they have not merged their business and advertising operations, as allowed under federally approved "joint operating agreements," and the second paper isn't some money-

losing vanity project, such as the Reverend Sun Myung Moon's Washington Times or right-wing financier Richard Mellon Scaife's Pittsburgh Tribune-Review. It's a trend that numerous local observers eye with trepidation -- among them former city councilor Larry DiCara, now a lawyer in private practice.

"I buy the Herald every day. And when I'm out of town I have somebody buy it for me, because it's that important to me to have two newspapers in the city," he says.

A respected financial observer, looking at Purcell's plummeting circulation, assesses the Herald's long-term financial viability thus: "No matter what happens, five years from now his numbers are going to be significantly worse than they are now, and if there's a recession they're going to be horribly worse. I don't think there's any way around that."

Pat Purcell, of course, knows this as well as anyone. Which is why his efforts to reinvent his business are so crucial.

The first five and a half years of the Purcell regime have been good ones for the Boston Herald.

Now comes the hard part.

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