More bad news from 400 North Broad Street — but just how bad is a point of contention. First, a memo sent around the newsroom yesterday by Daily News city editor Gar Joseph:

Folks:

The realities of our business have recently forced another reduction in news hole. We are now down 20 percent for the year. Also, the Commerce Bank briefs page counts against our news hole budget. What we know from our reader surveys is that readers want the variety of stories we give them, so we are not going to change that. But what we must do is try to tell those stories as concisely as possible. Turning a 15-inch story into an 11-inch story almost always produces a better written story. So that’s our goal as we adapt to the new realities. Please keep that foremost in your minds as you discuss story lengths with your editors. Managing the problem on the front end is much better than just whacking away at overly long stories on the back end.

A 20 percent cut in editorial space in less than a year? Maybe not: DN managing editor Pat McLoone, who says he’s seen a lot of cuts in his years at the paper, contests that estimate. “Gar’s wrong,” McLoone says flatly. “I’m not going to get into the number, but it’s nowhere near that high.”

And venerable DN columnist Stu Bykofsky thinks McLoone is right on the number — whatever that might be. “I think you’d have to go back several years,” he says, “to find cuts that [accumulate to] 20 percent of the news hole.”

Philadelphia Media Holdings CEO Brian P. Tierney apparently gave a rousing talk to the Pacific Area Newspaper Publishers Association last week, all about the incredible success story that is the Philadelphia Inquirer. It is difficult to say what Tierney might have gained by flying halfway around the world to give a presentation to 350 editors and publishers from 23 countries, but if the full rundown available at Garcia Media is any indication, he bowled them over.

A couple of highlights, as transcribed by a conference attendee:

“We have an incredible armament of assets, starting with the brand. Our greatest asset is journalists. We also know the community like nobody else. We are in a unique position to relate to advertisers. But we must go out and offer them variety. At the Inquirer we created a team whose function is to adapt advertising from other media — such as television — and design it for newspapers. We show these models to advertisers as possibilities of what could be. When we do, they buy it.”

And this:

“There were 18 people working on philly.com when I arrived, generating $1 million in banner ads. Today, we have 70 people working on philly.com, generating $16 million in banner ads.”

Judging by the rest of this long report, however, there was no mention made of PMH’s continuing financial woes or the recent cost-cutting, which we’ve covered here and here.

As the financial troubles of Philadelphia Media Holdings (PMH), previously reported here, continue to mount, more layoffs are coming at the Philadelphia Inquirer and Daily News. Specific newsroom employees are being approached and asked to consider accepting voluntary layoffs, says administrative officer Bill Ross of the Newspaper Guild. “The idea is that they’ll get the severance agreement negotiated under the contract,” he says, “and they will save someone with less seniority from facing layoffs.”

Ross says there is no word yet on how many employees will be cut in the latest round of bloodletting or exactly when the blood will begin to flow.

PMH is currently involved in a forbearance agreement with its creditors that lasts through September 10th, which appears to be undermining the market’s confidence in the company. According to a Standard & Poor’s report, PMH’s loan was trading at 70 cents a dollar in early June, but is now trading in the mid-40s — a signal that the market believes PMH is in serious financial difficulty.

In the midst of this, DN publisher Mark Frisby is evidently taking a hands-on role in negotiations with the union; PMH publisher Brian P. Tierney has been absent from the talks. “We’re actually working together,” says Ross, “because we have to.”

In a new twist, the papers are said to be eyeing the ranks of newsroom managers for layoffs rather than reporters. “Our members have taken enough hits over the last couple of years,” says Ross, “and new management under Mark Frisby has realized there are layers and layers of management that haven’t been touched.”

In addition to layoffs, the papers are also expected to announce a plan to consolidate various newsroom positions — such as photographers and copy editors — at the Inquirer and Daily News sometime this fall. As might be expected, the rumor mill is churning out stories faster than the newsrooms are, including that old perennial Is the Daily News going under? “There was actually a rumor last week that the Inquirer would be folded into the Daily News,” says Ross, laughing. “It’s just rumors.” — Steve Volk

According to a report released today by Standard & Poor’s, the owner of the Philadelphia Inquirer and Daily News has received a forbearance agreement from its creditors that will run through September 10th. Philadelphia Media Holdings, the investor group put together by publisher Brian P. Tierney to acquire the papers and philly.com in 2006, will face a serious financial penalty — interest on its debt will climb a full percentage point — in exchange for being allowed to skip payments during that period. PMH has also offered to surrender $15 million from its revolving line of credit, reducing it to $35 million.

The change in the line of credit is moot, yet speaks volumes. The company is already prohibited from accessing its credit line after violating a term of their loan covenant several months ago. S&P is also reporting that PMH is seeking a $3.2 million letter of credit — a short-term, stopgap funding measure.

Perhaps most tellingly, the market is shying away from a media ship that looks increasingly like the Titanic. PMH’s loan was trading at 70 cents a dollar in early June, but is now trading in the mid 40s — another signal that the market believes PMH is in serious financial difficulty. “The good news is their lenders are continuing to work with them,” says Chris Donnelly, vice president of Standard & Poor’s LCD, a unit that tracks the leveraged finance market. “Without an agreement that gives them access to their revolving credit line, they probably have a very challenging cash position. But this buys them some time to negotiate a permanent solution.”

A phone call to PMH and an e-mail to Tierney seeking comment were not immediately returned. — Steve Volk

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Press Lord 2.0

Last week, nosy NBC 10 reporter Lu Ann Cahn donned a skullcap and went undercover to enter the dark and nefarious world of a local rave called “God’s Basement,” exposing the not-so-shocking truth that some of its attendees are A) underage and B) “getting high.”

(more…)

Hillary Clinton phoned in to John DeBella’s WMGK morning show today to keep pace with Barack Obama’s Philadelphia morning show appearances (all tied up now, 2-2) and avoid saying anything incendiary.

(more…)

Hillary Clinton’s heroic hand-shaking efforts on a tarmac in Bosnia back in 1996 may have been completely discredited, but even if she had saved 14 Bosnian babies being tossed from a helicopter, it would do little to help her chances of victory at this point. So, as much as it feels like Pennsylvania is this crucial, make-or-break state, could it really affect the election that much?

Not really. Will Bunch — the Clinton Killer, if you will — agrees that Pennsylvania’s influence can only go so far.

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Though hopes were raised mightily today when Fox 29 announced a special “Kerri-Lee TV” segment scheduled for Monday night, ardent fans of Kerri-Lee Halkett’s, ahem, reporting skills should be made aware of what it’s not.

No, Fox 29 will not be presenting a 24-hour live feed of its eye-candy anchor being shadowed by probing cameras as she folds her laundry, washes her dog and goes to yoga class. (Although we can safely assume that would be a ratings bonanza — pity that the station’s producers aren’t so forward-thinking.)

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Or, better, that he’ll be Howard Eskin’s “worst nightmare,” according to Michael Klein’s Inqlings column. The brash-talking Missanelli, who has a a history of confrontational relationships with his former colleagues, is back on air in the Philadelphia area after the WPEN shakeups. He’ll host on 950 ESPN between 3 p.m. and 7 p.m., overlapping with Eskin’s slot on 610 WIP.

(more…)

The American Society of Magazine Editors released the names of the finalists for the 2008 National Magazine Awards — the Oscars of the magazine biz — in New York this afternoon, and we’re pleased to announce that Philadelphia has been nominated in the category of General Excellence (100,000 to 250,000 circulation) for the second year in a row. This makes our third General Excellence nomination in the past decade, and our 25th ASME nomination since the awards were founded in the mid-1960s.

We’re up against four national magazines: Mother Jones, Foreign Policy, Paste and Radar. Winners will be announced at a May 1st gala at Lincoln Center in New York. If you can’t get editor Larry Platt or any other staffers on the phone the next morning, you’ll know we brought home the Ellie.

2008 National Magazine Award Finalists [ASME]