Local Investors Buy Philadelphia Newspapers For $55M

By Pat Loeb and Jericka Duncan

PHILADELPHIA (CBS) — Philadelphia’s two major daily newspapers have been restored to local ownership. A group of business, civic, and political leaders have paid $55 million for the Inquirer, Daily News, and their web site.

It is the fifth time in six years the newspapers are being sold.

Managing partners of the new ownership group are South Jersey parking lot magnate Lew Katz and Cooper Hospital chairman George Norcross III, a pair whose political and business interests made journalists nervous as the sale was conducted in extreme secrecy.

“This newspaper hasn’t made money for years,” said new Philadelphia Media Network partial owner, George Norcross III.

The new owners of the parent company of the Philadelphia Inquirer and Daily News, plan to change the decline of the paper, without layoffs, for now.

katznorcrosshankowsky  loeb Local Investors Buy Philadelphia Newspapers For $55M

(Managing partners Lewis Katz, left, and George Norcross, center, are joined on stage by fellow Inquirer/Daily News investor William Hankowsky, developer of the South Philadelphia Navy Yard. Credit: Pat Loeb)


Today, Katz sought to put their concerns to rest.

“The whole notion that I or any of our owners would in any way interfere with the management of the news, with the decision that you must make in what you print, will never happen,” he said.

The four other partners include philanthropist Gerry Lenfest, who will be the new chairman of the board.

The new owners say they have no plans for further layoffs or any management changes while they focus efforts on how to make the papers profitable.

“We don’t have all the answers,” said Norcross. “We hope to grow this enterprise, not to lay people off.”

“It struck me as a situation where I could give back,” said investor William Hankowsky. “It’s a business, but for me, it’s a civic venture.”

The purchase price — which includes up to $10 million from investors to fund operations — is less than 15 percent of the $515 million paid by a group of investors in 2006, and far less than the $139 million creditors paid at a 2010 bankruptcy auction.

The buyers established a new company, Interstate General Media LLC, to operate Philadelphia Media Network.

“I just walked through for the first time in my life, the daily news room,” said new investor Lewis Katz. “Sick my stomach, empty, empty, empty desk.”

The sale comes as Philadelphia Media Network has announced plans to cut 45 positions this month, including 40 in the newsroom (see related story). Last year, the newsrooms lost 20 jobs.

When asked how the new owners plan to change their business model Lewis replied, ” We have some ideas, but I don’t want to broadcast them. I don’t think that’s the best way to execute a business plan.”

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  • Monster69

    Darn, I was hoping that the Democratic party newsletter would be sold to someone who would clean house and introduce integrity. Bring back the Bulletin.

    • Res Ipsa Loquitor

      They tried to bring back the Bulletin a few years ago, but the new owner was extremely conservative, and ran it as a mouthpiece for the Republican Party and the Catholic church. It folded after just over 2 years.

      • A pack of thieves

        I give this liberal rag another year unless they change their ways. No one wants to read lies.

  • Margaret Motheral

    Obviously the paper is not going to have any journalistic investigation into the lawyers/ developers/ big businessmen’ political in Mt Airy and Chestnut hill corruption and environmental and human rights crimes.

  • news junkie

    We must pray that the investors keep their word, and do not dictate editorial policy, either politically or favorable pieces on advertisers.

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