Boston Herald publisher looks to cut costs at paper

Boston Herald publisher Patrick J. Purcell will meet with officials of the paper's labor unions Thursday amid widespread expectations that he is looking at making significant cost cuts in the tabloid he purchased from Rupert Murdoch 11 years ago.

Herald staffers said a number of options may be on the table. They include shrinking the size of the paper, reducing staff, and narrowing the Herald's coverage area and focus to Boston and nearby communities.

In an interview, Purcell said that ''these are all possibilities," and he has asked department heads to look for ways to reduce their budgets.

The Herald's circulation and advertising revenue have been suffering, and the paper has said The Boston Globe's recent acquisition of a 49 percent stake in the Metro Boston newspaper also hurt its ability to compete in the Boston market.

''We are going to be looking for efficiencies across the company," Purcell said. ''We're going though a soft patch in the economy. We've had a rough couple of years . . . Whether this suggests a fundamental change in the Herald, I don't think we're at that point yet."

Several union officials said the meeting with the publisher may clear up some of the uncertainty building up at the paper about where the Herald is heading.

''We all understand change is imminent," said Lesley Phillips, president of the Newspaper Guild of Greater Boston, which represents about 280 Herald editorial and commercial employees, who have been operating without a contract since November 2003. ''What it is we don't know. We all understand it's important to the future of the Herald."

''Right now, we're in a holding pattern" said newsroom union shop steward Tom Mashberg. ''We're waiting for the publisher to meet with union presidents and outline what his vision is for the near future."

The Herald's daily circulation has dropped to 240,759 from about 263,000 four years ago, according to the latest figures on file with the Audit Bureau of Circulations. ''You've got fundamental changes taking place with newspaper readership," Purcell said, citing the difficulty in attracting younger readers. The publisher also said that due to ''continuing softness in the economy," Herald ad revenue fell in the latest fiscal year.

When The New York Times Co., owner of the Globe, disclosed in January its plan to buy for $16.5 million a stake in the Boston Metro -- a free tabloid aimed at younger readers -- Purcell unsuccessfully tried to persuade the US Department of Justice to block the sale, arguing that the papers' combined circulation and advertising strength would unfairly alter the competitive balance in the market. The purchase closed last week.

Many newspapers are having problems with advertising revenues and circulation and are facing challenges from free papers and the Internet.

''The revenue flow for newspapers, particularly if you're the second newspaper in the market, is questionable," said David Morse, a former assistant publisher of The Christian Science Monitor in Boston. ''There's no one in the newspaper industry in markets like Boston who has more ability to enhance revenues and cut costs than Pat. However, the trends are not moving in favor of daily newspapers. I have no doubt that Pat has to look at ways of doing things differently."

The Herald embarked on one significant strategic change in 2003 when Ken Chandler, a former Herald editor, returned to the paper to oversee its transformation to a flashier tabloid. In November of that year, citing the need ''to get our bottom line into better shape," Purcell launched a series of layoffs and buyouts that affected 19 employees. Last year, Chandler was named editorial director and editor Andrew Costello and managing editor Andrew Gully -- who had steered the paper on a newsier, more traditional editorial course -- departed.

In the past few weeks, the Herald has suffered several setbacks. The Justice Department declined its request to halt the Metro deal. On Feb. 18, a jury awarded $2.09 million to Judge Ernest B. Murphy, the plaintiff in a high-profile libel case against the paper. Purcell said he is ''still analyzing" whether to appeal that verdict. Another libel trial against the Herald is scheduled to begin in Barnstable Superior Court on April 19.

At the same time, the Herald newsroom has been rife with rumors about a possible sale of the paper and Purcell's Community Newspaper Co., which includes more than 100 Boston area community and specialty papers. The name that has most frequently surfaced is Hollinger International, which owns the Chicago Sun-Times and more than 100 community papers in the Chicago area.

''The Hollinger rumor is a result of us comparing notes and operations," Purcell said. ''Anything else is all speculation."

Mark Jurkowitz can be reached at jurkowitz@globe.com.