Philadelphia Newspapers Owner Files For Bankruptcy Protection

PHILADELPHIA — The owner of The Philadelphia Inquirer and Philadelphia Daily News filed for Chapter 11 bankruptcy protection Sunday in an effort to restructure its debt load.

Philadelphia Newspapers Inc., owned by Philadelphia Media Holdings LLC, is the second newspaper company in two days, and fourth in recent months, to seek bankruptcy protection.

"This restructuring is focused solely on our debt, not our operations," chief executive officer Brian P. Tierney said in a statement. "Our operations are sound and profitable."

The filing Sunday indicated the company has between $100 million and $500 million in assets and liabilities in the same range. The company said it will continue the normal operations of its newspapers, magazines and online businesses without interruption during the debt-restructuring process.

"In the last two years, we experienced the rare trifecta of a dramatic decline in revenue, the worst economic crisis since the Great Depression and a debt structure out of line with current economic realities," Tierney said.

Tierney said the company's goal was to bring its debt in line with "the realities of the current economic and business conditions."

The company has long sought to offset declines in advertising revenue and circulation with moneysaving moves and improved efficiency, including sharing editorial functions of the two papers' newsrooms.

The Newspaper Guild of Greater Philadelphia notified its union members of the filing in an e-mail Sunday night.

The e-mail, obtained by The Associated Press, tells members to stay calm. The e-mail says "the company is still in business, the papers are still publishing" and members should report for work.

A group of investors led by Tierney bought the two Philadelphia papers for $562 million in June 2006.

According to the Audit Bureau of Circulations, the Inquirer had an average weekday circulation of 300,674 as of Sept. 30, down 11 percent from the prior year. That made it the nation's No. 19 daily by circulation.

The paper's Sunday circulation averaged 556,426 as of Sept. 30, down 14 percent from the prior year. It ranks as the eighth-largest Sunday paper.

The filing is the latest blow to newspapers. The Journal Register Co. filed for Chapter 11 on Saturday. The Chicago-based Tribune Co. sought bankruptcy protection in December, and The Star Tribune of Minneapolis followed suit last month.