A Los Angeles investment group is pledging a $5.75 million bid for the Boston Herald, the second public bid for the tabloid since it filed for bankruptcy in December.
Revolution Capital Group filed its bid yesterday with the federal bankruptcy court in Delaware. The company previously offered to buy the Herald in 2013.
Components of Revolution's bid add up to more than the $5 million offer that newspaper giant GateHouse Media made last month.
Revolution is offering $3 million cash for the company, agreeing to honor $750,000 of paid time off for employees who join the company, and is pledging to pay out $2 million in severance.
The new bid explains it expects to keep 175 of the Herald’s about 240 employees — the same number as GateHouse planned.
Revolution said it will not assume the collective bargaining agreements with the company’s unions. The company also plans to let employees buy up to 10 percent of the company’s stock.
Revolution is led by Scituate native Robert Loring, who once worked as an intern for the Herald’s sports desk after graduating from Boston College, according to a press release. His company was not initially approached by the Herald's broker when the paper's publisher, Patrick J. Purcell, made the tabloid available for sale.
The bankruptcy court is expected to set an auction date for the paper soon.
The Herald reported last month at least three other inquiries have been made about the paper.
Below is the full text of today's press release:
BOSTON (MA) Tuesday, Jan. 2 – Boston Herald, Inc. (BHI) Publisher Patrick J. Purcell announced that Revolution Capital Group (RCG), and former owner of the Tampa Tribune, this morning submitted a bid in U.S. Bankruptcy Court to purchase the operational assets of the Boston Herald media companies.
The filing makes RCG the second company to express interest in owning BHI and its flagship Boston Herald newspaper. The Herald announced on Dec. 8, 2017, the same day it filed a voluntary Chapter 11 bankruptcy petition in the District of Delaware, that it had reached an agreement withGateHouse Media, LLC, for them to acquire the company's operational assets.
Any purchase of the Herald's media affiliates is subject to court approval. By filing for bankruptcy protections, and even with a purchase agreement in place with GateHouse, the court requires BHI to hold an auction to allow all potential buyers an opportunity to submit competing offers. An auction date has not been set.
RCG is an affiliate of Revolution Media Group, LLC, and both are led by Robert Loring, who grew up in Scituate and worked as an intern on the Herald's Sports Desk after graduating from Boston College. He owns a home in the Boston area, and several years ago expressed an interest in acquiring the Herald. The newspaper company, at the time, was not for sale.
Purcell said, "We appreciate the increased interest in the Boston Herald companies and look forward to a vibrant court-managed process to determine what is in the best interest of the newspaper's future."
According to a corporate statement from Revolution, "In existence since 2009, Revolution is active in acquiring lower and middle market businesses, corporate divestitures, carve-outs and other special situations throughout North America and Europe.
"As Founder and Managing Partner of Revolution, Loring has nearly 20 years of direct private equity investing experience and has been involved in all aspects of corporate deal making. As owner of the Tampa Tribune, Revolution was ultimately successful in helping that newspaper merge with the other major daily newspaper in the Tampa area."
The Herald, hindered like many other newspapers with significant pension and retirement liabilities as well as declining revenue with the onset of digital media and a growing variety of news originators and aggregators, had some 900 employees at its peak in 2000. Today it has 240; more than 120 of them work in the newsroom.
Purcell explained to employees in December that BHI filed its bankruptcy petition to maximize the value of the company and its assets by selling the business as a going concern under the supervision of the Bankruptcy Court. The company contemplates that the sale will allow the operation to continue, providing the greatest stability for employees, customers and vendors; as well as the best return to unsecured creditors.
The Boston Herald and its digital and broadcast affiliates continue day-to-day operations, providing breaking news to its daily newspaper readers and online consumers as usual.
Purcell was named publisher in 1984 by Rupert Murdoch when News Corp owned the paper. Ten years later, Purcell bought the newspaper and remains publisher today.
The Boston Herald's roots date back to 1846 when it was a single two-sided sheet of news published by a group of Boston printers. In more recent times, the media company has been anchored by the 64,500-circulation Herald, known for its eye-catching Page 1 photos and headlines, and also has a loyal online following at BostonHerald.com and on its Herald Radio platform.
After several weeks of confidential negotiations, the newspaper company agreed in principle in early December to sell BHI to the same company that bought Community Newspaper Co. (CNC) from it 11 years earlier. The Herald had purchased CNC in 2001 from Fidelity Investments.
GateHouse Media, headquartered in Pittsford, NY, is one of the largest publishers of locally-based media in the United States. In Massachusetts alone, it publishes the Worcester Telegram & Gazette, the Cape Cod Times, The Patriot Ledger and more than 100 other weekly and daily newspapers.
