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Business Mogul Mulls New Bid For Philly Newspapers

Stocks in this article: REV

The creditors paid $139 million for the company after forcing the sale when local investors who paid $515 million for the company in 2006 missed debt payments in early 2009. The creditors have since sold the iconic newspaper building and plan to move staff to much smaller space in a long-vacant department store this year.

Some editorial functions will be merged, but the company wants to maintain separate brands for the broadsheet Inquirer and tabloid Daily News, along with the website and a new weekend publication called SportsWeek, according to Bill Ross, executive director of the local newspaper guild.

In a memo Friday, Publisher Greg Osberg urged staff to stay focused on their work in 2012.

"We will not comment on rumors as we continually evaluate the operations and prospects for the company to determine the best course of action for our shareholders and the company," he wrote.

Lawyer Larry McMichael, who represented the former owners during their bitter bankruptcy fight with lenders, said he's gotten a few calls this week from local parties. He could not disclose specifics.

"There is interest in the community about buying the papers and re-establishing local ownership," McMichael said.

Perelman noted that The New York Times reported a 12 percent quarterly drop in earnings Friday. He said he believes that newspapers are "cutting their own throats" by posting their work on the Internet. The Times and other news companies now charge for some online content, while Philadelphia Media Network charges for digital products for mobile phones and other devices.

"It's a crazy situation," Perelman said. "There's a long drink between 'interested' (in the Philadelphia company) and 'buying it.'"

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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