Fidelity buying Harte-Hanks' Boston-area papers p. 17

By: George Garneau CONTINUING TO GOBBLE up Boston-area newspapers, a unit of the investment firm Fidelity Capital has agreed to buy three competing dailies and 11 weeklies from Harte-Hanks Communications Inc. for an undisclosed price.
The deal, expected to close around year's end, would quadruple the daily holdings of Fidelity's Community Newspaper Co. by adding the Middlesex News in Framingham, News Tribune in Waltham and Daily Transcript in Dedham.
The Framingham paper leads the trio with 34,000 daily circulation, 44,000 Sunday. Harte-Hanks has owned it since 1971 and bought the other two ? the 8,000-circulation Daily Transcript and 9,000-circulation News-Tribune, both evening papers without Saturday or Sunday editions ? in the mid-1980s. The three papers have separate, though cooperating, newsrooms, but merged ad sales, circulation and production operations.
Community's growing legion of paid and free weeklies had been Harte-Hanks' biggest competitor.
"Through a friendly rivalry over the years, we have gained a great deal of respect for the dedication and professionalism of Harte-Hanks employees and the local franchise value of their newspapers," Community chairman and CEO William Elfers said in a statement.
He noted the acquisition provides penetration in 10 new communities and expanded coverage in 14 others.
The deal would add 180,000 homes to give Community 766,000 weekly circulation, or 666,000 unduplicated, and would boost its roster of dailies to four, and weeklies to 78. Community's coverage area would grow to include 106 communities in eastern Massachusetts.
Harte-Hanks, based in San Antonio, said the proceeds from the sale will be used to "accelerate" growth. The deal would leave it with six daily papers, all but one in Texas.
An editor in the Harte-Hanks group said a sale has been rumored for years.
"You're surprised when it finally happens ? not that it happens," the editor said, adding that the already profitable papers probably drew a higher price because of rebounding advertising and circulation in a strengthening local economy.
Fidelity has assured Harte-Hanks employees that for the time being they will keep their jobs and pay, though the papers have no union contracts.
Ironically, the deal makes Community's own Marlboro Enterprise-Sun, at 6,200 circulation six days a week, the smallest of Community's dailies.
In another irony, Community president Jim Hobson, a former Middlesex News publisher who put the Harte-Hanks community papers together but who left in a dispute, will be back in charge.
Boston Globe spokesman Richard Gulla said the acquisition was simply another indication of the stiff media competition in the area.
Boston already has two daily papers and a strong alternative weekly. Community since the late 1980s has amassed a major ring of community papers around Boston by buying North Shore, Beacon and Tab groups. Another group, Mariner, still operates 16 weeklies on the South Shore. And the Globe has been busy shoring up its defenses, building zoned Sunday editions, a new monthly homes-for-sale magazine, college papers and a total-market-coverage advertising publication that goes to 750,000 homes a week.
"We haven't been standing still," Gulla said.
"This is a piece of the puzzle that puts Fidelity in a stronger position," the Harte-Hanks news executive said, predicting Fidelity "will definitely be a stronger force in the marketplace. They have deep pockets and have shown a commitment to the marketplace."