A group of local business leaders announced Monday their purchase of Philadelphia Media Network (PMN), the parent company of The Philadelphia Inquirer, Philadelphia Daily News, and Philly.com, the region’s largest and most popular online news source.
The new owners, all with deep ties to the Delaware Valley, include local business magnate Lewis Katz; George E. Norcross III, board chairman of Cooper Health System and executive chairman of Conner Strong and Buckelew, one of the nation’s largest insurance brokerage and consulting firms; H.F. “Gerry” Lenfest, the founder of Lenfest Communications, who is widely recognized as one of the preeminent philanthropists in the nation; William P. Hankowsky, the chairman and CEO of Liberty Property Trust and chairman of the Greater Philadelphia Chamber of Commerce; Dr. Kris Singh, president and CEO of Holtec International, a world-renowned nuclear energy technology company founded in Marlton; and Joseph Buckelew, chairman of Connor Strong and Buckelew. They have formed Interstate General Media, LLC to own and operate PMN, though the company will still trade under its current name.
The purchase price was approximately $55 million, plus an additional investment of as much as $10 million in working capital to operate the company. PMN was previously owned by a group of hedge funds and banks, including Angelo, Gordon & Co., L.P.; Alden Global Capital; Credit Suisse Securities LLC; and McDonnell Investment Management CFA. The price now being paid represents a nearly 50 percent discount to the $100 million the previous owners were reportedly seeking for the properties when word of the possible sale came to light in late January. Former Philadelphia mayor and Pennsylvania governor Edward G. Rendell had been leading the group, but recently stepped back from the process.
In a press release, the investors announced they will keep Gregory Osberg on as CEO. In assembling the new ownership team, Katz indicated that his priority was to attract a diverse collection of prominent local business and civic leaders who recognize the importance of the newspapers to the region’s future.
“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.
The six new owners made it clear that they also are committed to a policy of non-interference and will sign a pledge supporting the newsroom’s independence, after questions about interference arose over coverage of the sale. The pledge was drafted largely by the newsroom’s leaders: Inquirer editor Stan Wischnowski, Daily News editor Larry Platt, and Philly.com editor Wendy Warren. “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.”
The Inquirer, a 183-year-old newspaper with a legacy that includes 18 Pulitzer Prizes, is the third-oldest surviving daily newspaper in the United States. The Daily News, which began publishing in 1925 and has won the Pulitzer Prize three times, is currently published as an edition of The Philadelphia Inquirer. Both papers have been battered in recent years, as media properties throughout the country have faced the recession and subsequent sluggish recovery. The imminent sale comes as PMN eliminated 45 jobs in March, and recently said it would cut an additional 35 positions over the next six months.
“We all recognize that the newspapers hold a unique position of public trust throughout the Philadelphia region, and as owners we are stewards of that trust,” Lenfest, 70, said. “In a very real sense, we view the purchase as a civic investment for Philadelphia’s future, and we are committed to upholding the great journalistic tradition that has been the hallmark of the newspapers and philly.com.”