The Boston Herald’s next chapter will be written in a downtown law firm’s office.
Three teams of bidders will gather on Tuesday at Brown Rudnick, which represents the Herald, to compete for the tabloid.
Initially, only one company made an offer when the Herald went on the market, although the offer had a big catch. GateHouse Media proposed paying $4.5 million in cash and up to $500,000 in paid time off — based on the Herald’s liabilities (totaling $31 million in December) being cast aside in US Bankruptcy Court.
The promise of a relatively unencumbered Herald soon lured two other bidders. There was Revolution Capital Group, a Florida investment firm led by Robert Loring. Then the Denver-based newspaper chain Digital First Media arrived, in time for last Friday’s deadline. Loring’s initial bid: $3 million, plus $2 million for severance and $750,000 for paid time off. Digital First’s offer is not yet public.
GateHouse, based near Rochester, N.Y., is publicly traded through its parent, New Media Investment Group, which has ties to Fortress Investment Group. Digital First is owned by Alden Global Capital, which, like Fortress, is a New York investment firm.
GateHouse is a logical bidder, with its cluster of papers big and small in the region. The Globe currently prints the Herald, but GateHouse might find room on its presses in Providence or Auburn. Plus, GateHouse could run Herald stories in its existing papers, and vice versa — much like in the old days, when the Herald and CNC, a local GateHouse predecessor, were together.
Digital First has just two dailies here (in Lowell and Fitchburg), but it also has a printing plant. Loring doesn’t currently own a newspaper but has some media experience and local ties, including a stint as a Herald sports intern.
The winning bid needs a bankruptcy judge’s approval.
Cuts are inevitable, regardless of the winner: GateHouse and Revolution have said they plan to reduce the Herald’s staff from nearly 240 to 175. But the competitive auction shows there’s still a market for daily newspapers — if you can buy one with as little debt as possible.Jon Chesto can be reached at email@example.com. Follow him on Twitter @jonchesto.