Fidelity Investments Quietly Builds a Paper Portfolio

Newspapers aren’t likely to spring to mind when people think of Fidelity Investments.

But maybe they should.

The mutual fund behemoth, which said last month that its newspaper division will buy 14 newspapers from San Antonio-based Harte-Hanks Communications Inc., is quietly establishing a small media empire in New England.

With the Harte-Hanks purchase, which includes three daily newspapers, the financial services company has boosted its newspaper holdings to 78 weeklies and four dailies.

“The Harte-Hanks purchase sends the message that Fidelity is a serious player,” said Mark Jurkowitz, executive editor of Boston magazine. “People were skeptical at first about Fidelity’s intentions.”

Indeed, Boston-based Fidelity says it is serious about expanding its newspaper business in eastern Massachusetts. The Harte-Hanks deal, expected to be completed by year end, will increase the combined circulation of Fidelity’s newspapers to 766,000 in 106 communities. The Boston Globe, a unit of New York Times Co., reaches 506,545 households daily and 811,100 on Sundays.

“We’re becoming a major media force in eastern Massachusetts,” said William R. Elfers, chairman and chief executive officer of Community Newspaper Co., Fidelity’s publishing arm.

Elfers wouldn’t comment specifically about Community Newspaper’s plans, but the Harte-Hanks purchase has local observers wagering that the company might have its sights set on more expansion.

Fidelity, which also owns Worth magazine, said it doesn’t release revenue or profit figures for its newspaper group. But in New England’s relatively robust advertising market, a large group of community newspapers can do quite well, industry analysts said.

“The bigger the footprint, the more success a company will have capturing advertising,” said John Morton, a media analyst with Lynch Jones & Ryan of Washington. The pattern Fidelity is setting in eastern Massachusetts is playing out across the country as suburban chains consolidate to compete with large dailies, he said.