It started, as things do these days, with a rumor on a blog. Jon Ham, the former managing editor of The Herald-Sun newspaper, posted an item on the John Locke Foundation’s Right Angles blog on April 18: “I just heard a rumor that the Paxton Media folks are going to kill The Chapel Hill Herald.” Ham, who helped launch the Chapel Hill zoned edition of the Durham daily in 1988, waxed nostalgic about the challenge of launching a daily operation designed to boost The Herald-Sun‘s competitive advantage against The News & Observer by providing in-depth local news for Orange County readers. “Extra staffing, more newsprint, office space, lots of overhead. But it kept The N&O at bay,” he wrote.

A few days later, Chapel Hill News Editor Mark Schultz posted an item to The N&O‘s Orange Chat blog repeating the rumor. “I don’t think it’s true, but my former boss says maybe,” he wrote, adding that The Herald‘s Hillsborough bureau has been shuttered.

Herald-Sun Editor Robert Ashley confirms that the paper is considering such a move, but he said that news of The Chapel Hill Herald‘s demise is “premature.”

“We are re-examining, as we periodically do, how to serve our readers in Orange County and Chapel Hill,” Ashley says. “We’re very much in the midst of those discussions. We may conclude that the best way we can serve them is to keep doing what we’ve been doing for the past 19 years, or we may conclude that there’s a better way. It’s premature to conclude how those discussions will come out.” (He declined to say what “better ways” might be on the table.) Ashley says the downtown Hillsborough office was closed months ago due to high rent and low use.

Besides The Daily Tar Heel, UNC-Chapel Hill’s student newspaper, The Chapel Hill Herald is the only daily newspaper consistently covering local news in Orange County. The Chapel Hill News, a competing paper published twice a week, is owned by The N&O‘s parent company and has changed focus in recent years to more feature-oriented community news; newsier content vies for space in the pages of The N&O, alongside news from the rest of the Triangle region. The Herald continues to cover the nitty gritty of local government on a daily basis.

“The Chapel Hill Herald really has done an excellent job of covering local government,” says Mayor Kevin Foy. “Their ability to track what’s going on, not just in Chapel Hill but in Carrboro, with the school board, with the county commissioners, and to do it every day makes a big difference in people’s ability to keep up with local news. I think that’s a hard commitment to make, to do the kind of work that they do.”

The paper’s coverage of Chatham County is also important, Foy says, because “the growth in northwest Chatham is part of our region. What’s going on there, and why, and how that interplays with what’s going on in southeast Orange County is important.”

Concern about the fate of The Herald has been looming since the Paxton Media chain acquired The Herald-Sun in December 2004, laying off 81 people soon thereafter. While circulation declines have been common across the industry for the past several years, The Herald-Sun has seen particularly stark drops since the acquisition: Sunday circulation dropped 17.1 percent between March 31, 2006, and March 31, 2007, to 37,436, according to the Audit Bureau of Circulation. Monday through Friday circulation dropped 17.6 percent, to 36,815, during the same period. Meanwhile, The N&O‘s circulation dropped by 0.4 and 0.5 percent, respectively.

Ham says he believes Paxton has never fully appreciated the need to compete with The N&O. “[Former Herald-Sun publisher Rick Kaspar] thought that if we owned Durham and we owned Chapel Hill we were safe, and we were for a while,” Ham says.

Ham recalls a conversation with Robert Childress, who became publisher after Paxton acquired the paper, just prior to the sale. “He took me over to this big map of the Triangle and said, ‘Explain this to me: I want to know why you guys are so obsessed with Raleigh.’ And I said, ‘Because they’ve been trying to put us out of business since 1985, that’s why.’ He just didn’t understand the strategy.

“If this comes true,” Ham says, “I hate to see it happen.”