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Cuts probably won’t end for Boston Herald under new owner

Denver-based Digital First is owned by a New York investment firm, Alden Global Capital, and operates newspapers in California, Colorado, Massachusetts and several other states.
Denver-based Digital First is owned by a New York investment firm, Alden Global Capital, and operates newspapers in California, Colorado, Massachusetts and several other states.

Digital First Media hasn’t yet made its vision for the Boston Herald public, as it goes before a bankruptcy judge Friday for approval of its $12 million purchase of the struggling tabloid.

But industry experts and former employees said that if the company sticks to the playbook it uses at many of its other newspapers around the country, the Herald should brace for more cost-cutting beyond the 60 or so positions that are expected to be eliminated when the sale closes later this spring.

The Denver-based newspaper group is owned by a New York investment firm, Alden Global Capital, and operates daily and weekly newspapers in California, Colorado, Massachusetts and several other states.

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Alden, these people said, has firm profit targets it expects its papers to meet, and many of its publications have laid off employees, closed offices, and shuttered printing operations to streamline costs.

“Even if they figure out some magic bullet for newspaper revenue tomorrow, that’s just going to go to their shareholders,” said Matt DeRienzo, a former top editor of several Digital First papers in New England who now heads a trade group for independent online publishers.

DeRienzo recalled being instructed to cut a staff of about 120 in half at a group of publications that included the New Haven Register. He left three years ago, feeling the company had no plan to return the papers to vitality.

Alden’s president, Heath Freeman, was part of the Digital First team that participated in the bankruptcy auction Tuesday in the Boston office of Herald law firm Brown Rudnick. Digital First, which also still goes by MediaNews Group, edged out GateHouse Media in the bidding.

As part of the sale, Digital First agreed to a condition that it will offer jobs to 175 Herald employees; the Herald reported a staff of 240 at the time of its bankruptcy filing in December.

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Executives at Alden and Digital First did not respond to requests for comment about the Herald sale, nor did Herald publisher Pat Purcell.

While Digital First is hardly alone in an industry stuck in a prolonged advertising slump, its reputation, particularly because of the affiliation with Alden, places it among the more well-known cost-cutters in the sector. In recent weeks, for example, the company announced layoffs at its California papers, which include the Mercury News of San Jose and the Orange County Register.

Consider the two dailies it owns in Massachusetts, the Lowell Sun and the Sentinel & Enterprise of Fitchburg.

Digital First closed its printing plant for the papers last year and outsourced the work to a GateHouse facility in New Hampshire. The editor of the Sentinel & Enterprise was recently laid off, and the two dailies’ new publisher also oversees papers in upstate New York. In February, the company will close its newsroom in Fitchburg, and its eight news employees will work remotely, using laptops.

Lowell Sun editor Jim Campanini said it is too early to discuss Digital First’s vision for the Herald.

“They do have a great staff, a very talented staff,” Campanini said of the Herald. “But there’s probably going to be changes, like with any acquisition. . . . I was glad that my company wanted to keep Boston a two-newspaper town.”

The runner-up bidder, GateHouse, had a more visible strategy to incorporate the Herald into its dense cluster of papers in the region — a footprint that stretches from Worcester to New Hampshire’s Seacoast and from Providence to Cape Cod.

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Still, GateHouse is known for its own brand of cost-cutting.

“It doesn’t make them outliers in the industry, but it’s also not really encouraging,” said the Worcester Business Journal’s news editor, Grant Welker, who has worked for both GateHouse and Digital First publications. “You tend to get the feeling that things are on a one-way street, where things are going to get tighter and tighter all the time.”

Media analyst Ken Doctor, who writes a column for Harvard’s Nieman Foundation for Journalism, predicts more cuts are coming to the Herald. In a column published Thursday that referenced the Herald sale, Doctor called Alden’s approach “vulture capitalism, pure and simple — the textbook practice of buying distressed and dying assets, squeezing them, believing that remaining ‘meat on the bone’ will pay off.”

But Martin Langeveld, a media analyst and board member of the company that bought the Berkshire Eagle and other area papers from Digital First in 2016, said there is a way for Digital First to get value from the Herald purchase beyond cost-cutting. He said the company could use the Herald as a beachhead for further acquisitions and create a larger “Boston metro media package that could be sold to somebody.”

DeRienzo, the former editor from Connecticut, said there are “some incredibly talented and dedicated journalists and editors working for them, and they can do great work in a structure that’s not ideal to work under. It doesn’t mean that we shouldn’t demand more from the owners, though.”

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Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto. Andy Rosen can be reached at andrew.rosen@globe.com.