BOSTON -- Newspaper publisher Rupert Murdoch has agreed to buy the Boston Herald American from the Hearst Corp., which threatens to close the financially ailing tabloid in two weeks unless its unions go along with $7 million in spending cuts as part of the sale.
Hearst officials Wednesday announced they had signed a 'memorandum of understanding' with Murdoch, who said the acquisition was based on 'our belief that Bostonians will support a bright and lively tabloid dedicated to their interests.'
But Frank A. Bennack Jr., president and chief executive officer of Hearst, said in a statement from his New York heaquarters the Herald American 'will take necessary steps to cease publication' if agreement is not reached with unions representing 800 employees by Dec. 3 on payroll savings and other unspecified cost-cutting measures totaling $7 million.
Representatives of the 11 unions and officials of Murdoch's New York City-based News America Publishing Inc. met in a closed session for 90 minutes Wednesday and declined to disclose specifics when they emerged.
News America Vice President Robert Page said, 'We've come to this city to try to preserve this newspaper.' He said Murdoch would try to maintain 'as many jobs at the Herald American as humanly possible.'
Chuck Jennings, president of Teamsters Local 259 and spokesman for the employees' council, said, 'The unions have made themselves available to negotiate with the Murdoch people and will continue to negotiate with them.'
Murdoch Executive Vice President Martin Fishbein criticized the Boston Globe for sending a telegram to the Herald's unions saying the Globe would seek the same concessions granted to Murdoch. He called it a 'reckless attempt' to interfere with the negotiations.
'We're not going to be bulldozed out of town by the Boston Globe,' he said.
Murdoch was reportedly seeking substantial personnel cuts in the paper's mechanical departments and elimination of contract protections for senior editorial staffers.
Robert Danzig, vice president and general manager of newspapers for Hearst, said the Herald American has lost an average of $1 million a month during 1982, despite a switch to a new big-headline tabloid format last fall. Circulation has increased with the new format, but advertising has not kept pace, he said.
Hearst officials said News America would assume all severance and pension liabilities and pay $1 million in cash on closing. Additional payments up to $7 million will be contingent on the future of the newspaper.
Danzig acknowledged Hearst would turn over assets worth many million dollars but added 'the terms are the best that we could negotiate in view of the financial condition of the Herald American.'
Murdoch's U.S. publishing interests include the New York Post; the New York weekly Village Voice; New York Magazine; evening, morning and Sunday newspapers in San Antonio, Texas, and the Star, a national tabloid that sells about 3 million copies in supermarkets each week.