The Philadelphia Media Network – owner of The Philadelphia Inquirer, Philadelphia Daily News and Philly.com – has been sold to a group of local investors for $55 million, with an additional $10 million more in working capital, Philly.com reported yesterday.
The sale marks the latest round in a game of pass the parcel, with the parcel getting smaller every time; PMN has changed hands four times in the past six years, and the current sale price is little more than a tenth of the $515 million that a previous group of Philadelphia investors paid for the media group in 2006, notes Alan D Mutter on his blog, Reflections of a Newsosaur.
The $55 million price tag is also significantly smaller than the $139 million that PMN’s last owners, Alden Capital Management and Angelo, Gordon & Co., paid for the company when they bought it out of bankruptcy in 2010, writes Mutter.
The drop in price aside, PMN’s sale has sparked comment due to the profile of the new investors, which include powerful New Jersey Democrat George E. Norcross III, parking lot magnate Lewis Katz and media businessman H F “Gerry” Lenfest. The New York Times points out that PMN “newspapers and Web site routinely cover Mr. Norcross and the rest of the potential owners” and concerns have been expressed in the newsroom that the group’s new owners might influence its coverage. Last month, for example, the Inquirer published an in-depth article about Norcross using his political influence in his management of a local hospital, as Politico notes.
The New York Times’ Amy Chozick, writing for The Pittsburgh Post-Gazette, also notes that the new group of buyers formerly included ex-Philadelphia mayor and Pennsylvania governor Edward G. Rendell, but he withdrew amid allegations that he might interfere with newsroom coverage to further his political interests.
Concerns about a lack of editorial independence don’t end here. The New York Times writes that when the sale was first discussed, there were complaints that PMN’s editorial leadership was interfering with reporting to favour the current buyers. The Times wrote in February that CEO and publisher of PMN Gregory J. Osberg had instructed the company’s senior editors to allow him to oversee coverage of the sale, and threatened to fire them if they ran stories without allowing him to clear them first. The paper also states that on February 6 and 7, PMN publications removed articles mentioning other potential buyers. The Times wrote that Osberg, who will continue in his position under the new ownership, denied that he had tried to influence editorial decisions.
Now, Philadelphia Inquirer journalist Mike Armstrong reports that PMN’s new owners will sign a pledge, promising that “the editorial function of the business shall at all times remain independent of the ownership and control of the company, and no owner shall attempt to influence or interfere with editorial policies or news decisions." He writes that, so far, three of the six new owners have signed the statement, which was put together by PMN editors.
Armstrong also quotes Katz, who states, "we do not want to run the newspapers. We want to merely own them for the benefit of our community."
Armstrong notes that advertising revenues at the media group have dropped by 50% over the last six years. Chozick states that PMN laid off 45 staff members last March and is rumoured to be considering 35 more redundancies over the next six months.
As it tries to ride out the storm, PMN is not alone. Roy Greenslade wrote last month for The Guardian that, according to the US government agency the Council of Economic Advisors, newspapers are the fastest-shrinking industry in America.