Will our 2 Paper Town Endure? How the sale of the Philly papers could affect our civil rights and the history of journalism

Yesterday, Joe DiStefano reported that the ad hoc firm set up by local developers Brian Tierney, Brian O'Neill, and Bruce Toll was close to sealing a deal for the Daily News and the Inquirer. If it's true (DiStefano cites an anonymous "person familiar with the sale") then that's bad news. It means today might be your last chance to influence the sale by submitting comments through the www.2papertown.com website.

The purchase price for the two papers is expected to be more than $575 million, but that only begins to describe what's at stake here for the people of Philadelphia. Of all of the dramatic changes underway in the local media landscape, this one may be the one that will cause the greatest impact, especially if you compare the possible outcomes.

The best possible scenario is for McClatchy head Gary Pruitt (who apparently has some appreciation for quality journalism) to select the bid from Yucaipa. (For bad options, see below.) Yucaipa is the investment firm of Ron Burkle, a California billionaire; Bill Clinton is on the board. Check out this beautiful nugget at the bottom of this article from the SF Chronicle about Burkle's purchase of a state law in California to protect him during his divorce. Burkle also claims to be the victim of extortion by a NY Daily News reporter. Meanwhile, the AFL-CIO once named him their humanitarian of the year.

That notwithstanding, Burkle has partnered with the Newspaper Guild, the union representing the newspaper employees, and has said he will offer employee stock options with the end goal of a worker-owner paper (what they call an ESOP or employee stock ownership plan).

Yucaipa is also the only bidder to declare that they will keep both papers open. Some, like Onex, have said they will close the Daily News. Others haven't declared.

The Guild put a full page ad in the Daily News soliciting letters of support. You can read what it said or visit their website, www.2papertown.com.

The website asks supporters to submit comments through email and lets you read what others have written. I'll be submitting a comment of support shortly and I encourage you to do the same.

The Newspaper Guild came into existence at a time when journalism was in ill repute. Underpaid reporters were mere conspirators in a crooked establishment and the general public was getting tired of it. The industry was suffering.

In the 1930s, the Guild brought a new professionalism to journalism and established a sense of respect for newspapers in the eyes of the general public. They set as their mission "constant honesty in news, editorials, advertising, and business practices; [and to] raise the standards of journalism and ethics of the industry." They won pay raises for reporters who were getting paid less than unionized drivers and printers, giving birth to journalism as the professional occupation we know today.

Today the news industry is again in peril. Certainly journalists from Judith Miller to Jayson Blair have a role in that, but the falling standards and bad reporting we see today are by and large the result of bad ownership, not crooked journalists. Unrealistic quarterly profit expectations from Wall Street have led to understaffed newsrooms; conflicts of interest on the business side have led to timid editorial leadership. The public knows this and they detest the corporate media for it.

Employee ownership may offer some salvation. Aside from "ESOP" companies paying lower taxes, it would take the papers off the stock market. The Philly papers are still profitable, netting about $50 million a year, a margin in the 10-15 percent range (which is far lower than the McClatchy average of 30 percent). That would allow the papers to focus on reporting the news, which is what we need newspapers to do.

But this is about more than good journalism. There are people's livelihoods and civil rights at stake. I say this as someone who has worked to de-professionalize journalism for his entire adult life. But alternative media has not figured out alternative business models yet. And we are certainly not reaching every corner of our communities.

Goldman Sachs has reportedly recommended that the winning bidder shut down the Daily News, which is such a wonderfully perfect culmination of the profits-over-people attitude that is destroying journalism in this country.

The closing of the Daily News would put (I'm still trying to find the number of) people out of work. More importantly, it would eliminate a major source of local reporting (even if it focuses on murders and sports). We would be left with the superficial and non-union Metro for daily local coverage. And we'd be shit out of luck for news on the Phillies, Flyers, Eagles, and Sixers.

The closing of the News would hit African Americans disproportionately. Unlike most urban papers, The Daily News is read by African Americans in proportion to their presence in the city. They're not going to start reading The Inquirer if the News goes away. They would be simply shut out of the world of information. This is a major threat to civil rights and to the human right to information and communication.

As I said, Yucaipa is the only bidder to have pledged to keep the Daily News open. If one of the other bidders wins the purchase, we are going to have to work to make sure they do not shutter the News. We are going to have the get the messages I'm talking about here out to our neighbors and then we'll have to do something about. We cannot leave it up to the labor unions and their cohorts to rally and write letters. We need a broad coalition.

Here are some of the bad sale options, the ones that will leave us with a lot of work to do:

  • Canadian-based Onex is the devil of the bunch. According to Wikipedia, the company "specializes in buying firms in Canada and the United States that are under valued or in need of restructuring and then later selling them at a significant profit." See also, "Staffers at Philly papers oppose Onex."
  • If Onex is the devil, real estate developers Brian Tierney, Brian O'Neill, and Bruce Toll are the handmaidens. They would be a worse option than Onex; Onex at least would only care about the bottom line. These guys would see the papers as subsidiaries to their real estate business. The Toll Brothers are McMansion builders who recently entered urban areas to build McCondos. This crew also has its hands in the push to develop casinos in Philly, which has sparked community protest. If they win the bidding war, there are dark days ahead.
  • Dean Singleton, the owner of MediaNews Group, in partnership with Hearst Corporation, already purchased 4 of the 12 papers McClatchy has put on the block. And they did it for $1 billion in cash to secure market dominance out in California. Singleton's a straightforward capitalist so you can expect him to take the advice of Goldman Sachs. His early bid of $575 million for the DN and the Inky is the one that everyone needs to beat.
  • Mortimer Zuckerman's Daily News LP, the publisher of the New York Daily News. Someone told me he was only interested in the News's printing machinery.
  • Christopher Harte is a former Knight Ridder executive. I'm told he worked under the last good guy at Knight Ridder, so he might not be so bad. But at this point, he seems an unlikely winner.

Beyond Philadelphia, the Newspaper Guild is pursuing the purchase or defense of The Akron Beacon-Journal, The San Jose Mercury News (now owned by MediaNews Group), The Monterey County Herald, The Pioneer Express in St. Paul, and The Duluth News Tribune.

More information on this story is available at

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2 Comments

  1. Comment thread at
    http://phillyimc.org/en/2006/05/23425.shtml

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