Original investors want out
Three investment firms which financed the Boston Herald's purchase of the Community Newspaper Co. want to cash out their remaining investment.
According to published reports Herald publisher Patrick Purcell, on right, met with newsroom employees Monday and told them that over the next two months he will seek other lenders to replace the Audax Group, Weston Presidio and Halyard Capital ( a subsidiary of the Bank of Montreal).
In July 2004, Purcell was able to repay about 85% of the principal investment to the three investment firms by refinancing $155 million of the original debt through a package with Wachovia Corp. Purcell would not say Monday how much the Herald still owes the three firms.
"The timeline for our existing equity partners has run its course, and they are looking to move on, and we are looking to replace them," Purcell said. Investment bankers Wachovia Capital Markets and Dirks, Van Essen & Murray, a major newspaper broker which has handled the sale of 13 dailies and 41 weeklies in Massachusetts in the last decade, have been hired to advise Herald Media in recapitalizing its debt and equity and to explore new strategic opportunities according to the story in today's Herald.
Herald & Globe have laid off 35 each, NY Times laid off 500 last month
The announcement comes amid struggles in the newspaper industry, both nationwide and locally. The Boston Herald announced last spring that it wanted to reduce its 145-person newsroom work force by one quarter. The New York Times Co., parent company of the Globe, said last month that it was cutting 500 jobs, including 35 in the Globe newsroom.
The Newspaper Guild of Greater Boston issued a statement saying its members were looking forward to working with Purcell to save the newspaper group.
Guild president Brian Whelan said today, "We know the sacrifices made by Guild members during recent contract talks are playing an important role in keeping the Herald viable and preserving Boston as a two-newspaper town."
Herald Media owns Community Newspaper Company which publishes 120 publications including three dailies, the MetroWest Daily News, the Milford Daily News, the Daily News Transcript, and 117 weeklies including four on Cape Cod, The Cape Codder, The Register, the Upper Cape Codder and the Harwich Oracle. It also owns Herald Interactive which runs all their web sites including bostonherald.com and townonline.com