Testimony continued in Delaware on Tuesday as Vice Chancellor Donald Parsons decides how Philadelphia’s largest media enterprise will go to auction.
Lewis Katz, one of the co-owners of the Daily News, Inquirer and Philly.com, said the enterprise should be sold through a sealed, public auction. This way, every interested party can bid based upon their value of the company, as opposed to turning the sale into a competitive bidding war.
Katz compared the private auction to a “poker game,” where parties would begin outbidding each other based on emotion rather than rationale.
Katz is at odds with fellow business partner George Norcross, who wants a private auction among shareholders, which includes the Newspaper Guild of Greater Philadelphia.
Norcross’s team argued that a private auction would ensure that the business remains in the hands of local owners, minimizing harm both to employees and to daily business operations.
Courtroom witnesses, which included employees, said the dispute among the owners has hurt advertising and circulation numbers and has lowered company morale.
George Loesch, vice president of sales and marketing for Philadelphia Media Network, the parent company of the papers, said that advertisers are using the dispute as leverage to negotiate better prices.
Norcross’s team estimates the company is worth about $77 million; both Katz and Norcross said they would be willing to pay that figure.
However, John Gregory Chachas, an investment banker who testified on Tuesday, hinted that the company’s price might not attract wealthy third-party buyers, based on the company’s tremulous revenue figures.
While he noted that the overall media industry continues to experience a decline, the figures presented by the papers represent an “unheard-of decline.”
Parsons will hear from the newspaper guild on Wednesday.