Businessman Katz buying Philadelphia newspapers
- Article by: MARYCLAIRE DALE
- Associated Press
- May 27, 2014 - 3:50 PM
PHILADELPHIA — Two business moguls who won control of The Philadelphia Inquirer at an insider sale Tuesday pledged to support serious journalism over so-called click-bait, but they conceded that advertising and circulation gains remain elusive.
Lewis Katz and H.F. "Gerry" Lenfest, a former cable magnate-turned-philanthropist, bought out their partners with an $88 million bid for the company, which also operates the Philadelphia Daily News and the news website Philly.com. In 2012, the current ownership group paid $55 million.
The winners vowed to fund in-depth journalism to return the Inquirer to its former glory and to retain its editor, William K. Marimow.
"It's going to be a lot of hard work. We're not kidding ourselves. It's going to be an enormous undertaking," said Katz, who said that advertising and circulation revenues have fallen for years. "Hopefully, (the Inquirer) will get fatter."
Rival owner George Norcross, an insurance executive and powerful New Jersey Democrat, had pushed for "hyper-local" news and sports coverage to boost revenues. His daughter, Lexie Norcross, helped run the Philly.com website, which often uses celebrity news and other teasers to draw online clicks.
By contrast, Katz's longtime partner is Inquirer city editor Nancy Phillips, a Marimow protege and veteran investigative reporter.
"It is time to return the company's focus to journalism, and away from conflict among its owners," Norcross said in a statement.
The increasingly bitter feud between Katz and Norcross became public last fall when Marimow was suddenly fired. Katz sued, charging that Norcross needed his vote to make the move. A judge agreed, returning the 66-year-old Marimow to the newsroom, at least until his contract expired this year.
"Bill Marimow wouldn't need a contract with us," said Lenfest, 83, who will serve as interim publisher until the post is filled.
Digital revenues at the company have fallen below what they were in 2006, according to recent court testimony. The company's overall revenue has dropped from $500 million in 2002 to just over $200 million in 2012, Norcross said.
"I think it will settle nerves in some departments and fray nerves in other departments," said Daily News columnist Howard Gensler, president of the local Newspaper Guild, whose members have endured regular rounds of layoffs and wage cuts. "Ultimately, I hope it gives us the stability and leadership to move forward."
Katz, 72, made his fortune investing in the Kinney Parking empire and the Yankees Entertainment and Sports Network in New York. He once owned the NBA's New Jersey Nets and the NHL's New Jersey Devils and is a major donor to Temple University, his alma mater.
Lenfest, who made more than $1 billion when he sold Suburban Cable to Comcast Corp. in 2000, has vowed to give away nearly all of his fortune, donating hundreds of millions of dollars to arts and education causes.
Norcross remains one of the most powerful figures in Philadelphia's southern New Jersey suburbs, with interests in media, health care, education, banking, insurance and politics. He owned 52 percent of the company, and will therefore get a healthy return on his investment.
Katz called the past two years "nightmarish" and apologized to the company's nearly 2,000 workers.
"This public conflagration wasn't good for anybody," Katz said.
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