New Philly Newspaper Ownership: We’re Local!
Important Details: Geno’s or Pat’s? Sylvester Stallone or Tom Hanks? Web-centric or Philly-centric? The home of cheesesteak, the Phillies, and Ben Franklin may make American history again.
McClatchy announced last week that its auction of Philadelphia’s two daily newspapers, the Inquirer and the Daily News, had ended. The victor: Philadelphia Media Holdings, a group that only recently came into existence with the sole goal of buying the two hometown papers. The company agreed to pay $562 million for the papers, about 8.5x-9x EBITDA. It beat out several other interested buyers, including MediaNews (which had just agreed to buy four former KR papers from McClatchy), Avista Capital Partners, Mort Zuckerman’s Daily News L.P., Onex Corp., and Yucaipa Cos., the Ron Burkle-funded, union-friendly company that had bid for all of the former KR papers.
What makes the win unusual is its localness. The past decades have seen a strong move away from local ownership, with family after family selling to newspaper chains. Now as the chains are reluctant to pay good dollars – their investors say, what, more newspapers!?! – new buyers are coming forward. It’s another indication of how fast the newspaper landscape is changing.
The company’s new CEO is 49-year-old Brian Tierney, a local businessman, Republican leader, and associate of Donald Trump. He’s also a guy who picketed the papers in 1991 when he thought they were being unfair to another of his clients, the Archdiocese of Philadelphia.
Would this advocate change the nature of feisty, independent journalism in Philly, once a Pulitzer-winning hotbed? Tierney responded to the newsroom, in the newsroom, directly, as reported by the Inquirer itself:
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"I was an advocate in advertising and public relations for my clients. Now I’m going to be a zealous advocate for this organization," Tierney said.
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Pressed on how his promise to respect the newsroom will be enforced, Tierney said: "I’ll beat the crap out of anyone who tries to break it."
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"So, you used to be an S.O.B., now you’ll be our S.O.B.?" Inquirer deputy health and science editor Karl Stark quipped at one of the employee meetings. Tierney joined in the laughter.
Each of Tierney’s investors has signed a pledge not to interfere editorially with the paper.
Tierney called the new Philadelphia Experiment a lab (curiously, just what MediaNews’ Dean Singleton said of his acquisition, the Mercury News last week). If that experiment is truly Philly-centric, it will try to arouse reader and advertiser interest in supporting the hometown paper. If that experiment is as Web-centric as it is Philly-centric, it will embrace the Web as a new organizing tool for news, community, and the buying and selling of local goods and services, through Philly.com. The latter is a lot tougher, especially in a national/global, Web-moving news and commerce world.
While much of the media attention will be on editorial independence going forward, as true a test of the papers’ ability to report with neither fear nor favor will be how many people are doing the reporting. The Inquirer (down 5.1%) and the Daily News (down 9.3%) have slashed dozens of jobs in the last several years. Now we’ll see the crunch as local businesspeople (including the new owners, who represent businesses, homebuilders, developers, financial advisers and insurance brokers) decide to spend their advertising dollars, in print and online.
Meanwhile, McClatchy – which, remember, hasn’t yet closed its deal on buying the papers it announced it is selling – says the last six Knight Ridder papers it plans on divesting will be sold off by early June.
In Outsell’s Opinion: Kudos to feisty local ownership for taking the shot and adding a new approach to bringing news into the 21st century. You know things have changed when buyers pay a half a billion dollars for something and declare it an experiment. Outsell believes that experiment is just beginning anew in Philadelphia, and in other cities, as publishers try to figure out the new print/online alchemy. Both patience and passion will be needed, and the new Philly owners seem to have – going in – some of both.