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Earlier this month, upper management at Philadelphia Media Network (PMN), the parent company of the Philadelphia Inquirer, the Daily News and philly.com, performed what, in a newsroom, is a dangerous bit of magic: They made a blog post disappear.
In this case, the post was by Daily News reporter David Gambacorta, outlining developer Bart Blatstein's plan to assemble a coalition of investors to buy PMN, which is also the subject of a bid by a group including former Gov. Ed Rendell, South Jersey political boss George Norcross and Comcast-Spectacor chairman Ed Snider.
The prominent act of censorship — followed by more chilling omissions, tight controls apparently exercised from the very top of the company and the apparent exclusion of competing bidders including Blatstein and philanthropist Ray Perelman — has garnered a chorus of headlines from the New York Times to Jim Romenesko's popular journalism blog. It has also offered an alarming prelude to what Philly journalism might look like under the tight grip of Rendell, Norcross and others in a powerful local ownership group.
"I've been on the inside, so I know that when the boss has an interest he doesn't even have to articulate it," says former Daily News editor and current Committee of Seventy president Zack Stalberg. It's a matter of changing "behavior in such a way as to make the boss happy."
Meanwhile, speculation runs rampant as to why Angelo Gordon and Alden Global Capital, the two hedge funds with majority stakes in PMN, seem so intent on selling to the Rendell-Norcross team. A few connections are apparent: Rendell has praised the management skills of Gregory Osberg, the PMN publisher and chief executive known for his high-profile (but not necessarily successful) initiatives to remake the company for the digital age. And City Paper has learned that Rendell has a relationship with Roger Altman, chairman of Evercore Partners Inc., the firm managing the sale. In 2008, Rendell, a supporter of Hillary Clinton's presidential candidacy, rounded up Altman and nine others to pledge $12 million to fund a re-vote in Michigan, after the Democratic National Committee revoked the state's delegates because Michigan had held its primary early, against party rules.
PMN vice president Mark Block says the connection will not influence the sale. He also downplayed accusations of censorship, stating Gambacorta's reporting was misleading and, bizarrely, calling the post a "press release" rather than "an original-content story." Since then, though, other acts of censorship emerged: the Inquirer killed a story about the sale, and scrubbed an online version of another article of details of the company's 2011 financial performance.
Last Tuesday, Teamsters entered the fray, protesting censorship and the bidding process outside the Inquirer building. The union's close ties to former owner Brian Tierney during PMN's 2009-'10 bankruptcy proceedings provoke suspicions that the public-relations powerhouse has a hand in the current fracas. During that unsuccessful fight to retain control, Tierney called Angelo Gordon "a secretive hedge fund that has its fingers on the throat" of newspapers.
John Laigaie, president of Teamsters Local 628, which represents blue-collar newspaper workers, denies Tierney is behind the protest, but says he may be involved in the bids. He says, "People reached out to me about Mr. Perelman. And I think Mr. Perelman and those people were brought in by Mr. Tierney." Tierney denies that.
Meanwhile, a climate of newsroom fear has evolved into a resolve to defend journalistic integrity. The New York Times published a damning account last week in which Osberg denied having demanded oversight of all coverage of the sale — and Daily News editor Larry Platt contradicted him. "Initially there was a lot of fear and people were very timid. And then, when the New York Times thing hit, it was just a free-for-all," says Wendy Ruderman, a Pulitzer-Prize-winning Daily News journalist. "Larry Platt essentially called Osberg a liar, and nothing happened to Larry."
Reporters began circulating a petition denouncing censorship, and the majority of newsroom employees, top editors included, signed.
As the Philly papers "have gone up for sale once again, we watched with dismay as our own coverage of the process was compromised and censored," read the petition. "Our employers promise this won't happen again. That must be the case."
Block adamantly denies that Osberg told editors he wanted control, saying, "We made one big error, which I've admitted to. And that is when David Gambacorta made a post on Philly Clout. Instead of updating the blog ... we chose to just have the company response and remove the original post."
The papers' sale coverage has become harder-hitting in recent days, but suspicions remain. Even if partisan political intervention is not a concern — as Rendell argues, he and Norcross, Democrats, are counterbalanced by Snider, a fervent right-winger and Ayn Rand acolyte — there's the prospect of meddling simply to protect the purchasers' vast personal interests, political and financial.
A few heavy-handed bosses could have a chilling impact. "Norcross is allegedly calling reporters at both papers and already acting like he is the boss, and trying to kill stories," says one newsroom source.
Another source is unsure whether the calls are more frequent than before — Rendell and Norcross have long been vocal with reporters — but they have a newfound resonance. "I actually do think it's about editorial control," says the source. "Why wouldn't [Norcross] do that if he owned the place? And that's the concern."
The other concern is financial, and even existential: The beleaguered company announced 37 new layoffs and buyouts just last week. "There has been so much focus on the political aspect," says Daily News reporter Will Bunch, "that people haven't talked about, 'Do these guys know what it takes to run a newspaper in 2012?'"
The cuts were announced alongside details of a major overhaul ominously referred to as "the newsroom merger," which will combine some reporting and editing functions at the traditionally competitive papers. The overhaul cuts the already-hemorrhaged newsroom to the bone — the Inquirer alone lost more than 350 jobs since the late '90s — and has revived rumors the Daily News might close.
"This fear feels more real to me," says Ruderman. "People are very worried that it's all some sort of trick. It's hard to trust management, even though you want to."
Daily News city editor Gar Joseph says the papers will maintain distinct identities. "In honor of Newt Gingrich, I'm calling it an open marriage," he says. "Each paper will retain a large group of enterprise, investigative and specialty reporters and columnists unique to the brand. They will provide staff to an enlarged breaking news desk, which will serve as a sort of wire service for both newspapers."
Yet the censorship and layoffs have bred distrust. And they have revived criticism of Osberg, mastermind of (by many accounts failed) initiatives like remaking the philly.com website (with which CP has a content-sharing agreement) and a much-touted bundled tablet-plus-subscription offering.
"Everything he's done, as far as I can tell, has not worked," says one newsroom source. "[The tablet] was a shitty product. He thought they would sell out the first week [and] order more for Black Friday. They still had them, and they probably still do."
Block insists the unsold tablets were intended for distribution to educational institutions. He calls it a successful pilot project.
Looking ahead, no one's saying Rendell's coalition will necessarily do worse. After all, neither local nor out-of-town owners have unblemished records when it comes to managing the Philly papers. Longtime owner Walter Annenberg notoriously crafted coverage to fit his interests. It was only the distant Knight Ridder team, which took over in 1969, that revived the papers. When Tierney arrived in 2006, reporters feared the public-relations executive would interfere. But he eventually won them over.
"It may not be a bad thing," says a source. "But because they've chosen to ... hide from any honest accounting of what is and is not going on, all that's left is for people to gossip, and speculate and panic."
