The new owners of the Philadelphia Inquirer and Daily News have, according to the newsroom union, threatened to “liquidate” their assets by this Friday if workers represented by the company’s 11 unions refuse immediate concessions. When word went out on Thursday, Jan. 10, it seemed a dark art conjured from co-owner George Norcross’ political world, the tactic of a South Jersey Democratic boss who once pressured a small-town councilman wearing a government wire to dump a political enemy. “Fire that fuck,” he told him. “You’re gonna get your fucking balls cut off,” he advised another.
The language rang more prosaic for one former Inquirer reporter.
“Liquidation?” he mused. “It’s like a furniture store or something.”
The owners — less than one year after they took over the papers and Philly.com under the banner of Interstate General Media — are demanding $8 million in savings in wages and benefits from the newsroom alone, according to the Newspaper Guild. It’s the latest twist in a story of rampant palace intrigue, including turmoil in newsroom management and company ownership, often accompanied by competing (sometimes personal) agendas. The impact on the old-fashioned business of news-gathering, not to mention those who undertake it, has been devastating.
Over six years, ownership of the fiscally troubled papers has ricocheted from the Knight-Ridder and then McClatchy chains to a group helmed by Republican PR powerhouse Brian Tierney. They were picked up in bankruptcy by Wall Street’s Alden Global and Angelo, Gordon & Co. and then, finally, purchased in April 2012 by the present consortium of local corporate and political heavyweights led by parking magnate Lewis Katz, philanthropist H.F. “Gerry” Lenfest and Norcross. Former governor and mayor Ed Rendell dropped out of the group before the sale went through.
The transition was bumpy starting even before the sale was finalized. When management interfered with coverage of the sale last February, reporters angrily protested. The new owners, whom critics worried would have every reason to meddle in the newsroom, pledged not to. More importantly, they promised to ensure that the diminished company would thrive. Norcross told the Inquirer in April that they had “every confidence in the world, and have invested tens of millions of dollars in our belief that we are going to make this successful and do things that people said couldn’t be done.” He told the journalism-news site Poynter that layoff rumors were untrue. The goal, Katz added, was to “build employee morale.” He said they could afford to take a long-range view thanks to their investment of “patient capital so the banks don’t get in the way.”
Newsroom morale, however, quickly dropped.
Last October, Inquirer editor Bill Marimow — installed by the new owners in April — orchestrated a flurry of curious reassignments of veteran staffers to unfamiliar and, in some cases, less-desirable beats. It was perceived by many to be an effort to push some older reporters to take part in the round of buyouts offered soon thereafter; some did just that. The Guild has filed a grievance. Many regard it as part of a strategic move to strengthen New Jersey coverage as small local papers there are downsizing. Yet numerous reporters see Marimow’s reassignment of widely respected if cantankerous editor Kathy Hacker to South Jersey obituaries (which she now writes under her married name, Kathleen Tinney) as a measure of retaliation against someone he did not like. Marimow and Hacker both declined to comment. Reporters are on edge.
“Bill Marimow can be rather vindictive,” says one newsroom source. “And Norcross and Katz are very hard-headed businesspeople. If they see somebody as disloyal, they can make trouble for anybody.”
Over at the Daily News, reporters suffered yet another wearying round of paranoia in December, when Katz hinted in an interview with the American Journalism Review that they might close the working-class People Paper.
And last week, the owners announced yet another round of buyouts — even as the company continues to hire new, often younger, reporters. Though all of the other unions’ contracts expired in October 2012, the newsroom’s contract is in force until October 2013. Owners want givebacks now.
“I can’t help seeing this as a bluff — a crude, self-destructive bluff,” says Inquirer architecture critic Inga Saffron. “I don’t think the owners realize how much they are damaging the papers’ reputation and credibility when they say such things. We know that this is not about being legitimately broke because they are hiring at a steady clip. It is about bringing down labor costs. They probably do need to reduce operating expenses, but this is not the way to do that.” Many believe the threat is a mostly empty one, including Inquirer business columnist Joe DiStefano, who says this tough talk is par for the labor-negotiations course.
Expectations in the newsroom are mixed — after all, the ownership would lose credibility if the threat passes unfulfilled. But a representative of Interstate declined to comment for this story, and the company has itself never made the threat of “liquidation” publicly. Norcross and Katz, according to newsroom sources, are experiencing some sort of rift. That would be familiar ground. A dispute between the newspapers’ two former hedge-fund owners, according to a September 2012 New York Post article, was what had ultimately prompted them to sell the company: Alden Global Capital’s Randy Smith wanted to merge the company with the Journal Register Co., a newspaper chain that Alden also owned. But the two hedge funds could not agree on how to divvy up the savings they would reap.
The dailies are already running bare-bones operations. The Inquirer’s Washington, D.C., Trenton, and Harrisburg bureaus are now the only ones outside of metro Philadelphia. Not long ago, they posted correspondents worldwide. Saffron had stints in Moscow and Belgrade. Today, the paper is crowded with wire reports, and local reporting in a city and state plagued by poverty and corruption grows dangerously thin.
The papers have also cut back on opinion writers. Liberal Inquirer columnist Dick Polman was asked to reduce his column from weekly to monthly and to accept a lower pay rate. Polman, like former Inquirer cartoonist Tony Auth and science writer Faye Flam, sought refuge at WHYY. Investigative reporter Patrick Kerkstra’s weekly contributions are now also monthly.
The deteriorated news operation mirrors the papers’ financial decline in an industry where advertising-fueled, double-digit profit margins have been decimated by the Internet. Interstate purchased the company for about $55 million, whereas the previous Wall Street owners paid $139 million in 2010. In 2006, Tierney’s group paid $562 million. Last August, publisher Bob Hall announced that revenue was down $16 million for the first half of 2012, meaning more net losses despite cost-saving moves. The company had reported $17 million-plus in losses in 2011.
Meanwhile, Philly.com (which has a content-sharing agreement with City Paper) continues to be criticized for its poor layout and story placement. New pay-walled Inquirer.com and DN.com sites are supposed to be unveiled soon. Philly.com is moving to create its own original work, like a “Philly420” column by local pot activist Chris Goldstein.
The overall changes to Philly.com are being managed by Lexi Norcross, George’s twenty-something daughter, listed as a company “director.” Another “director” is Drew A. Katz, son of co-owner Lewis Katz, whose partner Nancy Phillips, formerly an Inquirer investigative reporter, is now reportedly a special assistant to the publisher.
There have also been questionable editorial choices. In November, the Inquirer ran an effusive profile of Amway tycoon Richard DeVos, one of the country’s wealthiest and most powerful right-wing activists, on the premise that DeVos is a major supporter of Philadelphia’s National Constitution Center. The reporter traveled to DeVos’ Michigan home for the profile — headlined “A key Constitution Center backer has small-town Michigan roots” — an odd expenditure for a cash-strapped paper, especially since DeVos makes frequent visits to Philadelphia. Lewis Katz sits on the Constitution Center’s board.
The paper also secured a helicopter so that a photographer could take aerial shots of the Cooper Norcross Run the Bridge, a charity event orchestrated by Cooper University Hospital, where the political boss chairs the board and wields vast influence. In December, they sent a reporter to cover Mayor Nutter’s visit to China.
Some changes have been cheered by the staff. In May, the new owners replaced widely disliked Daily News editor Larry Platt with former editor Michael Days. The newsroom burst out into applause when the changeover was announced — right in front of Platt.
But the owners’ decision to return longtime Inquirer editor Marimow to the helm has proven controversial. Some see a pattern in Marimow’s tactics, dating back to his tenure at the Baltimore Sun, where Marimow worked as editor and managing editor. In Baltimore, management made it a priority during contract negotiations to weaken protections against forced transfers, according to former Washington-Baltimore Newspaper Guild president Bill Salganik. Management eventually won the authority to transfer newsroom employees between bureaus and job titles. “As in Philadelphia, our perception was that it was disproportionately [impacting] older people,” says Salganik. “Some of the people during some of the buyout periods were pressured through reassignments.”
“There was definitely a pattern in which experienced, middle-aged reporters were shunted to less-than-desirable beats,” says mystery writer Laura Lippman, a former Sun reporter. “Marimow appeared to be uncomfortable with people with whom he could not have a mentor-protégé relationship.” Lippman says she was reassigned to a suburban bureau after complaining about unethical behavior by a young reporter Marimow had hired.
Former Sun columnist Mike Littwin, according to sources, infuriated Marimow by writing a union memo critical of management. Littwin came to Marimow’s office and told him, “Bill, it isn’t personal.” Marimow opened a copy of The Godfather and pointed out the passage where Michael Corleone says, “Don’t let anybody kid you. It’s all personal.” Littwin was transferred soon thereafter; he filed a grievance and won a settlement, sources say.
Marimow’s highest-profile critic is Lippman’s husband, David Simon, a former Sun reporter and creator of the HBO series The Wire. Simon dedicated a season of The Wire to depicting a Baltimore Sun crassly obsessed with squeezing savings and winning Pulitzers, and named one of the show’s most unsavory police officers Lt. Marimow.
This is a characterization that Marimow and others who have worked with him have vociferously denied. Marimow is known as an old-school reporter who relishes hard-hitting and attention-grabbing investigative journalism. Yet, as an editor, he has never had the luxury of presiding over a profitable newsroom — the sort of Inquirer newsroom that nurtured him, where he wrote his Pulitzer-winning stories on police abuse of civilians.
After he returned to the Inquirer last year, a controversial “newsroom merger” with the Daily News, introduced under previous management, was halted. Marimow reportedly protested a similar proposal at the Sun, when the Tribune Company had pushed its various papers to share stories.
Marimow wouldn’t comment for this story. But whatever his motives, they may be irrelevant if Interstate’s owners make good on their pledge to put the Inquirer on the block once again. As to what Philly’s dailies would be worth in 2013 — and whether anyone is even willing to not just buy them but actually invest in their survival — that’s another story.