Business owners Katz and Norcross left alone to bid on Philadelphia newspapers after Guild pulls out
The union representing about 500 union newspapers staffers said their backer had balked at the opening bid price wanted for The Philadelphia Inquirer and Philadelphia Daily News and so will not submit a bid. That leaves local business owners George Norcross and Lewis Katz to fight over the properties.
“The $77 million figure is not something anyone is willing to go near,” the lawyer representing the local chapter of the Newspaper Guild of America told the AP. “Nobody believes the value is that (high).”
A growing trend involves local business owners buying up the local daily newspaper, owning newspapers for their political influence more than for the hope to turn a profit. The real estate developer Doug Manchester bought the San Diego Union-Tribune from its private equity owners in 2011 and immediately began using the paper to push his agenda and endorse his choices for elected office – often with poor results.
On April 1, it was announced that the owner of the local NBA franchise, the Timberwolves, would be buying the local daily, The Star Tribune (Minneapolis).
The $77 million being demanded for the Philly newspapers supposedly will cover the costs the currently owners have invested. In 2012 the papers were bought for $55 million, far less than the $139 creditors of the paper paid for the properties out of bankruptcy court in 2010, and far less than the $515 a group of investors paid for the papers in 2006. Buying the Philly papers is like catching a falling knife, apparently.
Nonetheless, $77 million would not be much of a stretch for the two probable bidders: Lewis Katz is the former owner of the old New Jersey Nets NBA team, and George Norcross III is an insurance executive and a fundraiser for the Democratic Party in New Jersey. Both prospective bidders worked together to buy the properties in 2012, but fell out over running the papers.