PHILADELPHIA – After another tumultuous year on the job, frustrated workers at Philadelphia’s two largest newspapers vowed Monday to bid against feuding owners if the company again goes on the auction block.
The local Newspaper Guild would join with an unnamed partner to bid on The Philadelphia Inquirer, Philadelphia Daily News and Philly.com, according to court papers.
They would likely compete against two wealthy owners who want to force each other out. The company changed hands five times from 2006 to 2012 and appears likely to be sold again amid the power struggle, which moved to court over the October firing of Inquirer editor Bill Marimow. A judge later returned him to the job, although his contract ends this spring.
“The company seems to be gridlocked. No major decisions can be made,” Bill Ross, the guild’s executive director, said after a brief court hearing Monday. “There’s no leadership.”
The rival owners — George Norcross, an insurance executive and Democratic political force, and Lewis Katz, the former owner of the New Jersey Nets — are expected to mount competing bids if a judge agrees to dissolve their union.
The media company, worth $515 million in 2006, sold for about a tenth of that in 2012 when Norcross and Katz joined with other local investors to buy it from hedge fund owners. In exchange for $6 million in concessions, the new owners promised the guild a yet-to-be-determined share of profits if the company turned the corner in 2014, guild officials said.
Company lawyers say the company is heading toward profitability, but the guild fears it won’t see any returns this year because of the court fight. The union represents about 550 workers, including reporters, editors, photographers and advertising workers.
“The guild … has really seen nothing but pay cut after pay cut, unpaid furloughs, buyouts and so forth,” lawyer Lisa Lori said. “That’s why (workers) want an opportunity to put their hat in the ring.”
Norcross has petitioned for a private sale among current owners. Katz wants a public auction. Neither man was in court Monday, when Common Pleas Judge Patricia McInerney asked for briefs before ruling on the request to dissolve their partnership. Norcross holds a 53 per cent stake to Katz’s 26 per cent, but they have equal power on the two-man management committee responsible for key decisions.
The Philadelphia newspapers have struggled with circulation and advertising revenue over the past decade, as consumers increasingly seek out free news content online. During the same period, their various owners have spent millions of dollars on legal and bankruptcy costs.
“The morale right now is very low,” Ross said. “We’re at the point of profitability. We believe we’re due some profit sharing, and we want our piece.”