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.

Comments

[leonel]

Newspapers are becoming obsolete. If they are evaluated objectively for value, they are probably worth 10-20 cents a copy, given what a reader gets out of them. They are donated to some schools but the kids are not interested in reading them. They are transitioning to the internet and will then be combined with television broadcasts. Books are also becoming of school value only. So much for public libraries. They are now mainly for people to use free internet. This actually presages a big growth in free information available to the public. This is also leading to new ways of thinking. Less elitist ways of thinking.

[MED1025]

Just as the Bulletin went out of business when people stopped reading afternoon papers, the morning newpapers like the Inquirer are falling victim to changing habits. People read the internet or watch TV. However, giving a column to Rick Santorum has hastened the inevitable.

[moreless]

Economy aside, the problems at the Philly papers are self-inflicted. Tierney and Toll (Toll Bros) paid too much, and have been doing it on the cheap ever since. Just look at their website, it's a joke. They laid off the suburban staff of longtime writers and photographers, putting an end to suburban coverage. Most of their readership was in the suburbs. No coverage, no readers, no advertisers. Fill the empty space with wire stories and photos that can be found anywhere on the web. Blame can also be found with the workers and the unions. They let this charlatan(an adversary of the Inquirer) and home builder come in and destroy their paper. Amateurs.

[Enid]

Citizens and their dollars are king. Now lets act like kings. Off with their corporate head.

[larry278]

Yes, newspapers will recover, not. In 2010, there will be the WAPO & WSJ on the Atlantic Coast, maybe. The CSM is a weekly with a week-end print ed. A few regional daily papers will be M, W, F- maybe a week-end too. In Chicago, the Trib & S-T fold. Welcome to the age of the on-line newspaper.
The POST-DISPATCH used to be a good paper but St Louis is in the rust belt. If the P-D hires web people & keeps them they will have a good on-line paper; but, who will understand & use an on-line P-D? Maybe the P-D can add a Chicagoland ed & survive.
Since Sam Zell has the LAT, LA needs monied, creative people to create an on-line west coast paper. San Francisco & Silicon Valley have money, bright people & computer literate users. A west coast paper might fly.
The USA will learn to get reliable news on the web. Locals may do on-line up-dates & break even. Print on paper media is dead.

[AvgPlumber]

I grew up reading the Inquirer in the late-60s-to-early-80s; fine paper, journalistically among the best anywhere. I left the area about 25 years ago and returned about 5 yrs. ago, subscribing to the Inquire' upon my return. Well the bloom was off the rose for the Inquire'. I was amazed at how far the quality of the paper had declined, especially in the last year or so since Tierney, et al, bought the paper and began to clean house of the remaining quality staff. The editorial bias of the Inquire' became laughable, biased in favor of the stupid bumbling efforts of the GOP, lacking any journalistic integrity to remain plausibly objective.

Tierney has succeeded in proving you can't fit a square peg into a round hole with this bankruptcy filing (an exercise in NOT giving the people what they want; BTW what kind of an idiot blows the chance of a lifetime to sell special editions re: the Phillies 2008 WSC to a parade of fans numbering in the 2 million range?). Buying an Inquire' or a Daily News was as natural around here as buying a TastyKake (usually w/your choice of paper, Inky or Daily News). To GOP wonks, like stunsitfel, stick to what you know, commenting the Inquire' is editorially biased toward Obama shows major ignorance on the topic. I cancelled my subscription to the Inky a few years ago, it became too much of a Yellow Journalism rag.

[WorldGoneWild]

LOL @ the Inquirer and Daily News was as natural as buying a TastyKake! Too true! I cancelled my Sunday paper subscrip in September. I'll by it at a Wawa when there is something good to read in it or if I need coupons.

[larry278]

Since when did journalists have integrity?

[snakeman]

I'm from Philly and am glad to see these two papers fall. The new owners are greedy right wing nuts.
Brian Tierney is the worst, it serves him right. First they cut down the size of the paper, then they raised the price, I stopped reading those papers after that. Glad to see them go !!!!

[revolutionnumber9]

Although I grew up reading the Philadelphia Inquirer, I wouldn't miss it if were gone. That would leave quite the gap in the Philly metro market though. The alternative, outside of the internetz, are crappy local papers and regional tab rags. Good thing I moved far, far away from this scrappy city.

[mellene]

These papers need to get on board with online editions and truth-telling. It makes me sick to my stomach to see the kind of antics Murdoch creates in all the stuff he now owns. Most of it seems made up or overstated, like the chimp cartoon. I discontinued my WSJ subscription when he bought that knowing the paper would turn out garbage.

[take10]

In the end, the only paper to survive just may be toilet paper. Good riddance!

[Lex10]

....uh, any chance of just completely closing down Philly forever as a result?

[BlueTexan999]

Obviously a Mets fan.

[twofish]

Let me guess. Someone came in and bought the paper a few years ago, pulled out a bunch of money and left it saddled with debt. Now they want to use bankruptcy to rip off their workers and suppliers to reduce that debt. The owners will not suffer one penny's loss.

Time for another revision of the bankruptcy laws. It's one thing to say bankruptcy gives you a chance to start over, and another to use it to cheat the other players in the game. It's sort of like anti-virus software, you're always playing catch-up with the bad guys.

[ejay579]

Brian P. Tierney is a Republican operative. What can we expect?

[marnoldnine]

The PHILADELPHIA INQUIRER hired Rick Santorum to write an oped column. That should say it all for its political stance. Who cares anymore what Rick Santorum says.

[bsc]

The Inquirer is owned and run by a small group of extremely conservative and very wealthy republicans. They gave tons of donations to GOP campaigns. They are being bitten in the a$$ by the policies they supported (ie de-regulation of wall st, lowering taxes, etc)

[BethStuart]

I suspect Murodch is more interested in wielding political power than in running a business. That should make his investors nervous.