The sale of The Inquirer, Philadelphia Daily News, and Philly.com will likely be announced Monday, according to several sources.
A local investor group has spent much of the last two months negotiating to acquire PMN from its hedge-fund owners in a transaction valued at $55 million to $60 million, according to multiple reports. With paperwork still to be signed, delays are always possible at the 11th hour.
The buyers of Philadelphia Media Network Inc. are a group of local investors, led by George E. Norcross III, executive chairman of Conner Strong & Buckelew, a South Jersey insurance brokerage; and Lewis Katz, former chairman of Interstate Outdoor Advertising.
People familiar with the transaction identify the other members of the prospective ownership group as philanthropist H.F. "Gerry" Lenfest, Holtec International Corp. chief executive officer Krishna P. "Kris" Singh, and Liberty Property Trust CEO William P. Hankowsky.
Once the sale closes, the daily newspapers and their related website would be back in the hands of local owners. Since Oct. 8, 2010, PMN has been owned by a group of hedge funds and other financial investors led by Alden Global Capital and Angelo, Gordon & Co.
The hedge funds acquired the media company for $139 million in a 2010 auction overseen by U.S. Bankruptcy Court.
The company, which had been purchased for $515 million in June 2006 by a different set of local investors headed by public-relations executive Brian P. Tierney, proved unable to make payments on the more than $300 million in debt taken on to finance the purchase and filed for bankruptcy in February 2009.
The new ownership group will face financial challenges, as PMN has continued to experience advertising-revenue declines since it emerged from bankruptcy. While the privately held company does not disclose its financial statements, PMN management has confirmed that the company has not been generating enough advertising revenue to sustain its cost structure.
In addition, the prospect of Norcross, a South Jersey Democratic power broker, as an owner of the Philadelphia region's largest newspapers and its dominant news website has created some anxiety within those newsrooms, as well as in the outside journalistic community and among readers. Reporters, editors, photographers, and others who work in the three PMN newsrooms signed a public statement in February urging any new ownership group to respect their journalistic integrity.
PMN has been undergoing much change over the last year. The company sold its office building at 400 N. Broad St. to developer Bart Blatstein for $22.65 million in October. It plans to move to smaller offices in the former Strawbridge & Clothier space at Eighth & Market Streets as of July 1 in a deal partly subsidized by a $2 million low-interest loan agreed to by the city in exchange for retaining 625 jobs in Philadelphia.
The workforce has also gotten smaller under hedge-fund ownership. Last fall, eight employees in the newsrooms were approved for voluntary buyouts, and 14 employees, including computer operators, library staff and salespeople, were laid off. In March, 45 employees in the three newsrooms either were approved for a voluntary buyout or laid off.
It was unclear Friday how PMN's management might change under the news owners, including the status of chief executive officer Greg Osberg, who also acts as publisher. Following the ownership transitions in 2006 and 2010, the publisher and top editor of The Inquirer were replaced. Turnover often occurs among the ranks of senior management, particularly after a change in CEO.
One member of the team will not make the transition, however. Guy "Doc" Holliday, who had been PMN's chief revenue officer since May 2 and also oversaw national advertising, is no longer with the company, according to PMN spokesman Mark Block.
The move was part of a "reorganization of the advertising-sales division," Block said, declining to specify other possible changes.