Osberg remains CEO as local investors buy Philadelphia newspapers

The news that management once sought to squelch is official: Philadelphia Media Network, which owns The Philadelphia Inquirer, the Philadelphia Daily News and Philly.com, has been sold to a group of local investors, who will keep Gregory Osberg on as CEO. The group has said it will sign a pledge supporting the newsroom’s independence, after questions about interference arose over coverage of the sale.

The announcement marks the end of a difficult period in which Philadelphia newspapers struggled to report on their owners. But it doesn’t necessarily portend stability: Reporters got their hands on a memo last week saying that management plans to eliminate 35 more jobs, on top of 45 layoffs and buyouts that occurred earlier this month.

The buyers will pay $55 million to purchase the company, which went for $139 million in October 2010. They will also provide an additional $10 million “in working capital for operations.”

Osberg sent this note to staff about the sale:

I am pleased to announce that Philadelphia Media Network was purchased today by a group of local business leaders. This group of dynamic owners have successfully built and operated a variety of profitable businesses, they possess a strong desire to preserve and grow one of Philadelphia’s most important institutions and they believe that newspapers and digital media will continue to play a vital role in Philadelphia’s future. The press release, containing details about the group, is attached for your review. We will be hosting 2 events on Tuesday to allow everyone the opportunity to meet the new owners…lunch at 12:30pm in our public room and refreshments at 9:30pm in the SPP Cafeteria, all are welcome and I hope you can attend of one them. I look forward to seeing you tomorrow.

Greg

The constitution of the new ownership group has changed since formal bids for the papers were submitted at the beginning of March. According to the Inquirer, it now includes George Norcross, Lewis Katz, Krishna P. “Kris” Singh, H.F. “Gerry” Lenfest and William P. Hankowsky. A new name in today’s announcement is “Joseph Buckelew, chairman of Conner Strong Buckelew, an insurance brokerage based in South Jersey.”

In a press release about the sale, the new owners emphasize journalism’s value to Philadelphia:

“A world-class city needs world-class journalism to tell its story, and that’s what we have at The Inquirer, the Daily News, and Philly.com,” said Katz, himself a former journalist who upon graduating from Temple University began his career as an editorial assistant to famed syndicated columnist Drew Pearson. “These newspapers have an historic tradition of outstanding journalism in our city, and we want to preserve that tradition and marry it to the exciting digital opportunities that are revolutionizing the news business. …

“Great cities and great newspapers go together,” he said. “You can’t have one without the other. Journalists speak truth to power, hold our leaders accountable, and keep readers informed about the important issues of the day. We depend upon the news to tell us about the issues that impact the future of our region, and we trust them to tell us the truth.”

Originally the group of buyers included former Pennsylvania governor and Philadelphia mayor Ed Rendell, who left the group as it became the only suitor allowed to bid for the papers. Rendell’s political connections, as well as the clout of Norcross (a major Democratic donor in New Jersey), Katz (a parking lot baron), and Edward Snider (head of a company that owns the Philadelphia Flyers), have caused concern inside and outside the newsroom. Snider is not part of the group that purchased the papers.

Rendell told Dylan Byers he could have made a $1.8 million fee for finding the local investors, but he turned it down.

“I covered politics in New Jersey for nearly a decade, including a four-year stint in the Inky’s Jersey Bureau,” says Daily News reporter Wendy Ruderman, “and if anyone told me then that Democratic powerbroker George Norcross would one day own the papers, I would have laughed. I’m not laughing now.”

Worries that the new owners might impinge on editorial independence haven’t been assuaged by the fact that PMN management impinged on editorial independence when the staff tried to report on the sale. At one point, Philadelphia Media Network CEO Gregory Osberg told editors he wanted them to run all sale-related coverage past him, then denied the meeting occurred when New York Times reporter David Carr asked, then called back to acknowledge the meeting but stress that “he only wished to be notified of further coverage.”

Even before that sorry incident, Inquirer executive editor Stan Wischnowski told the Washington Post, “The anxiety is real….We’ve been covering a lot of these folks for decades.”

The press release offers assurances that the new owners respect editorial independence:

The new owners made it clear that they also are committed to a policy of non-interference with the operations of the newsrooms, and they will sign a pledge to that effect, one that was drafted with the participation of the newsroom leadership.

“Our intention is to own the business and find new ways to make the business successful,” said Norcross. “But we have no intention of running the business or influencing news decisions.”

Hankowsky said he expects the company to place greater emphasis on forging a dynamic new relationship with the region’s business community to drive advertising and sponsorship revenues that can support the high-quality journalism that has been a hallmark of the newspapers.

Brian Tierney, who led a group of investors who bought the papers in 2006, signed a similar pledge.

The Inquirer emphasized its watchdog role this morning as it celebrated winning IRE’s top award. Here’s the memo from Wischnowski:

To the staff:

If ever we needed more to be reminded of just how important our watchdog role remains in this community we serve, I have just been informed that our “Assault on Learning” project has won the top prize in the Investigative Reporters and Editors (IRE) awards competition in the category of print/online for the largest newspapers in America.

The project won the top prize for major metros, nudging out strong entries from the Washington Post, Los Angeles Times, McClatchy Newspapers and the Associated Press.

Congratulations to the entire “Assault on Learning” team, including reporters Sue Snyder, Kristen Graham, Dylan Purcell, John Sullivan and Jeff Gammage; photographers David Swanson and Ron Tarver; photo editor Michael Mercanti; multimedia editor Frank Wiese; copy editor Thom Guarneri; graphic artists Michael Placentra and Sterling Chen; and editors Mike Leary and Rose Ciotta.

There have been many attempts at chronicling violence in large urban school systems. But this series in many respects eclipsed all previous attempts by taking readers directly inside the hallways of Philadelphia’s schools through powerfully reported stories and heart-wrenching video, and providing a first-hand look at the major problems that exist.

This investigative work was highlighted by a series of gripping narratives, augmented by video narratives, and supported by dogged reporting and a sophisticated level of data analysis.  The power of the reporting has made safety in the schools one of the top initiatives for a city grappling with serious crime.

Thanks again to the work of this outstanding team, and to the entire staff for the sacrifices required to make this year-long project a success.

Stan

PRINT/ONLINE – LARGE

  • “Assault on Learning” The Philadelphia Inquirer, Philadelphia.
    Susan Snyder, Dylan Purcell, John Sullivan, Kristen Graham, Jeff Gammage

Judges’ Comments: “Assault on Learning” is local reporting at its highest level. We all know anecdotally that urban schools are tough places to survive, let alone learn, but reporters at The Philadelphia Inquirer went so much further in quantifying the violence and personalizing it in an irrefutable way. The Inquirer demonstrated the school system under-reported violent incidents and routinely failed to protect teachers and students. An intervention program was unmasked as nothing more than paper-shuffling. Following the project, the district has established a new protocol for reporting serious incidents and crime. For putting five reporters on this project for more than year, for overcoming the obstacles of closed environments and sealed records, and for putting a face on a violent school system and its victims, IRE honors The Inquirer for exemplary investigative work.

EarlierA timeline of Philadelphia ownership changes since 2006 |  Sale of Philly papers will test whether local owners can stay out of the newsroomPhilly papers will likely be sold to group led by former Governor Ed Rendell in closed bidding processAt least three stories about Philly newspapers sale killed by management

Julie Moos contributed to this report.

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  • http://pulse.yahoo.com/_O4IFEQTM3VEPQIZOXMTSKDURKQ Downtown

    With Osberg as publisher the papers won’t last 3 months

  • http://www.facebook.com/loualexander Lou Alexander

    I suspect $55  million was about what automotive advertising totaled in Philly in the late 1990s  Maybe this set of owners–with such a small debt burden–can make a go of it.  Otherwise Philly may find itself without a daily newspaper.