MEDIA GIANTS CIRCLE HERALD, CHANNEL 7 SEEN AS PREY IF FCC EASES RULES

With the Federal Communications Commission on the brink of acrucial decision that could loosen current restrictions on mediaownership, the eyes of Boston are focused on two independentoperators surrounded by a sea of media powerhouses.

Boston broadcast executives and analysts predict that the area'smedia landscape will largely remain stable after Monday's expectedderegulation vote. But they say that the greatest chances ofownership changes could come from Boston Herald owner PatrickPurcell, who might sell to the paper's former owner, media mogulRupert Murdoch, and from WHDH-TV (Channel 7), if owner Ed Ansin wouldlook favorably on suitors that could range from NBC, a subsidiary ofGeneral Electric Co., to The New York Times Co.

Ansin has denied any interest in selling his Boston station, andPurcell is discouraging such thinking. But in a market dominated bysuch major companies as Viacom Inc., Hearst Corp., Murdoch's NewsCorp., Tribune Co., and Times Co., there could be intense pressure onsmaller entrepreneurs to make a deal with the bigger media concerns.

"This is not one of those markets where you're going to seeimmediate action unless Rupert Murdoch and Pat Purcell renew theirmarriage vows," said Paul La Camera, general manager of WCVB-TV(Channel 5), a station some analysts think could change hands in aderegulated environment.

"I see it as stable, with the wildcards being Sunbeam," which isAnsin's company, and Hearst-Argyle, owner of Channel 5, said EdGoldman, general manager of WBZ-TV (Channel 4) and WSBK-TV (Channel38), the two stations owned by Viacom in Boston. "But again, anythingcould happen."

As a result of lawsuits by broadcasters challenging ownershipcaps, the FCC is under orders from federal courts to review a seven-year-old rule that no company can own TV stations reaching more than35 percent of American homes. Viacom and News Corp.'s Fox TV unitalready are slightly over the 35 percent reach, under temporarywaivers. The five-member FCC's Republican majority is expected toraise that cap to 45 percent and allow ownership of both TV stationsand a newspaper in the largest 80 percent of markets, while possiblyfurther loosening caps on radio station ownership.

Proponents of the changes, including FCC chairman Michael K.Powell, argue that in an era of proliferating cable, satellite, andInternet news sources, the current ownership caps are overly strict.Media companies see potentially huge profits and cost savings fromcombining TV stations or cross-promoting TV and newspapers and havinga single news and photography staff supply both outlets.

But critics, including US Representative Edward J. Markey ofMalden, the ranking Democrat on the House telecommunicationssubcommittee, contend the FCC changes could sharply reduce mediadiversity and localism, expanding the reach of cookie-cutter nationalprogramming.

The new rules will create "one communications juggernaut in everycommunity," warned Alex Jones, director of Harvard's ShorensteinCenter. "It would be very foolish for any newspaper in any town notto make a combination with a television station," Jones said. "That'sgood business. It's just bad policy."

For the Boston market, media executives say there are numerousscenarios for combinations. Ansin, whose emphasis on speedy pacingand flashy graphics revolutionized Boston TV news, could opt to cashout his winnings. Murdoch could pair the feisty Herald with his localFox affiliate, WFXT-TV (Channel 25). Tribune, which owns WLVI-TV(Channel 56), could buy another local television station or anewspaper. Times Co., which already owns The Boston Globe and theWorcester Telegram & Gazette, could extend its local brand with atelevision acquisition. Hearst-Argyle could sell Channel 5, theonetime jewel of local television stations.

Tampa-based Paxson Communications Corp., which is already 32percent-owned by NBC, has put itself on the shopping block, hiringinvestment bankers Bear Stearns and an appraiser that last monthvalued the company at $3 billion. Paxson owns Channel 68 in Bostonand two other stations in Martha's Vineyard and New Hampshire thatrebroadcast Channel 68.

For all of the interest, few executives believe there will be aflurry of deals after the expected FCC decision. "I think it's goingto be anticlimactic," said Channel 7 general manager Mike Carson,before adding the caveat: "I'm sure people will poke around."

A lot of local attention focuses on Ansin, who is marking his 10thanniversary operating a station that has dominated the crucial 11p.m. newscast wars. In the past, several media companies includingTimes Co. have expressed interest in Channel 7, an NBC affiliate,Carson said. Ansin said he is not interested. "I wish they wouldforget about it. We're not going to sell. . . . I like what I'mdoing."

Times Co., which owns 19 newspapers, eight network-affiliatedtelevision stations, and is part owner of the Boston Red Sox and NewEngland Sports Network, known as NESN, declined to comment on theimpact of any FCC deregulation or any possible interest in otherBoston media properties.

Still, La Camera said, "In the long term, I'm absolutely convincedthe Globe will have co-ownership with a television station in themarket."

Last year, when FCC chairman Powell spoke at Harvard about mediaderegulation, sitting in the audience was Purcell. A longtime friendand former employee of Rupert Murdoch, Purcell bought the Herald fromthe Australian-American media magnate in 1994 when Murdoch boughtChannel 25 and had to sell the Herald. But as the tabloid continuesto battle a rough economy, analysts wonder whether an end to thecross-ownership ban will pave the way for his old boss to buy thepaper back. In Senate committee testimony last week, Murdoch declaredthat he was not about to go on a buying spree.

Purcell isn't ruling out a purchase or a sale. Quoted in a recentHerald column, Purcell indicated he was interested in adding a radiostation to his holdings, but also said "we'll have to consider it,"if someone made him an attractive offer. Yesterday, Purcell said theissue of whether deregulation "means anything in the short termremains to be seen, but you know it certainly will give us moreoptions and opportunities to compete."

"I think Rupert will buy the Herald again," said Josh Bernoff, amedia analyst with Forrester Research in Cambridge. "There areenormous benefits to having both a newspaper and a TV station incross-promotion, the ability to have a common website and shareresources" - benefits that could be equally appealing to Times Co. ifit could make a deal for Channel 5 or 7, he said.

When it comes to any possible acquisitions by Channel 5's owner,La Camera said, "I don't see anything in this market." But Hearst-Argyle, which purchased WMUR-TV in Manchester, N.H., in 2001, is"looking to grow the television group," La Camera said.

It could also go the other way, media executives said. "Hearst-Argyle might be in play as a takeover target as a result of this,"Channel 7's Carson said.

Others cite factors - including ratings troubles (Channel 5finished third at 11 o'clock during the recent May sweeps period) andthe company's reputation as more of a middle-sized market operation -that point to the possibility Channel 5 could change hands.

Another possible player is Tribune, which owns a number of largemetropolitan newspapers and television stations. It runs Channel 56in Boston and owns the Hartford Courant and two television stationsin Hartford. Shaun Sheehan, a Tribune vice president, indicated hiscompany could be interested in expanding its media holdings inBoston. Asked if Tribune could be a buyer for the Herald, Sheehanresponded, "Make us a deal."

Mark Jurkowitz can be reached at jurkowitz@globe.com. Peter J.Howe can be reached at howe@globe.com.

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