Philadelphia Inquirer and Daily News bought for a fraction of 2006 sale price
A group of prominent local investors has bought the company that publishes the Philadelphia Inquirer, Daily News, and Philly.com.
The investors include former New Jersey Nets owner Lewis Katz and South Jersey businessman George Norcross. Both men have powerful political connections and Norcross has been the subject of much reporting at the papers.
Former Governor Ed Rendell, who had been a part of the group weeks ago is gone. Philanthropist Gerry Lenfest will chair the board.
The group paid $55 million for the company — that’s a little more than a tenth what the papers sold for in 2006.
At a news conference announcing the deal, Katz said the new owners have a signed a pledge to let the journalists at the papers do their jobs. “We do not want to run the newspapers. We want to merely own them, for the benefit of our community,” said Katz. Katz said the group will keep publisher Greg Osberg, who was criticized by reporters weeks ago for intervening to kill stories about an unfriendly bid to buy the company.
Katz said Osberg “has acknwoledged that he wasn’t that smart…when that incident happened.”
In an interview afterward, Osberg said he’d intervened to “delay” stories about the efforts of a group including developer Bart Blatstein to buy the company, because he felt the group was misleading reporters and he had critical information about the situation.
Asked if it wasn’t the reporters’ job to judge the information at hand, Osberg said that “in retrospect” he should have handled it differently.
Katz and Norcross said they felt Osberg had never had the chance to run the company well, because its owners had acquired it in a bankruptcy proceeding and had no real interest in the business.
Katz said he wants to give Osberg a chance to prove what he can do. In addtion to paying the current owners $55 million for the company, the new owners have pledged to put up to $10 million in working capital to invest in new initiatives and growing revenue.
Asked about reports that the current management had laid out plans to terminate another 35 jobs at the company in the next six months, Katz said there are no plans to trim the workforce – for now.
“None of us want to put people out of a job,” Katz said. “Unfortunately I can’t give you the comfort (of a no-layoff pledge). But truthfully, if this is all about layoffs, then this is a failure.”
Dan Gross, president of Local 10 the Newspaper Guild, which represents reporters, editors and photographers at the papers, said he was pleased the new owners were interested in putting resources into the company, rather than cutting.
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