The second bankruptcy auction of the Philadelphia Inquirer and Daily News produced a deal that made it to the closing table. The newspapers are now owned by Philadelphia Media Network, the company created by the senior creditors of Philadelphia Newspapers LLC.
Teamsters Local 628, whose members’ contract rejection had nixed the original deal because Philadelphia Media Network insisted on ending contributions to the union pension fund, voted a few days ago to accept a deal with Philadelphia Media Network that ended contributions to the union pension fund. Union leaders reluctantly endorsed the contract after the buyer agreed to make some employer contributions to the 401(k) plan which is the new retirement plan for the newspapers. The only other alternative would have been to strike and possibly leave the union members with no jobs.
The only real change to the deal which bought the newspapers out of bankruptcy was that Philadelphia Media Network reduced its winning bid to $105 million from $139 million. Former owners Philadelphia Newspapers LLC filed for Chapter 11 reorganization in February 2009 after defaulting on its debt of more than $400 million.
“We are pleased to finally begin operating the newspapers and Philly.com, and we believe that the company has tremendous potential as we build out our brands in the great city of Philadelphia, the fourth largest media market in the nation,” said Publisher and CEO Gregory Osberg. “We are committed to the long-term growth of the newspapers and the web site, and can’t wait to get started.
Osberg, who grew up in the Philadelphia area, takes over as Publisher and CEO after a 30-year news career as President and Worldwide Publisher of Newsweek and Newsweek.com, as well as various leadership positions at CNET and U.S. News and World Report.
As the new boss, Osberg said that two of his primary objectives are to accelerate content and platform integration, while also deepening the newspapers’ commitment to investigative journalism. To those ends, Osberg announced that Inquirer Editor William Marimow, a Pulitzer Prize-winning journalist, will return to the newsroom as a principal investigative reporter. Assistant Managing Editor Stan Wischnowski will serve as Acting Editor of the Inquirer and is apparently a candidate to take the post permanently.