The Long Fall of Philly Newspapers

Document gives inside look at financial decline of Inquirer and Daily News.

Oh, what an ugly difference a dozen years can make.

At the beginning of the 21st century, the newspaper business was a happy one, fed by fat profit margins and a lack of competition in most cities. Philadelphia was no different: Yes, it had two major daily papers, but they shared an owner, reached different audiences — and maximized revenue.

What’s happened since then has been brutal. Everybody knows about the bankruptcy, revolving door ownership, and multiple rounds of layoffs that the Inquirer and Daily News — along with their digital cousin, — have experienced in recent years. But a new document obtained by Philadelphia magazine shows just how deep the pain went.

The document is called “Interstate General Media: EBITDA Trend - 2000-2012.” (EBITDA stands for "earnings before interest, taxes, depreciation, and amortization" and is one way to measure a company's profitability.) And it reveals how the finances of Philadelphia’s leading newspapers imploded during that time — a period covering four owners: Knight Ridder, McClatchy, Brian Tierney, and finally the hedge fund owners who brought the newspapers out of bankruptcy. The last two years — that include two different sets of local ownership, one headed by George Norcross, the more recent one by Gerry Lenfest — are not included.

The document reveals:

  • That total advertising revenue — the financial backbone of the papers — dropped by three-fourths over a dozen years, plunging from $465.5 million in 2000 to just under $113 million in 2012.
  • That circulation revenue — the money contributed by the audience in the form of subscriptions and single-copy sales — fluctuated a bit, but ultimately fell precipitously from $118 million in 2000 to $81 million. (The Inquirer’s actual circulation fell even more quickly — from 373,892 copies a day in 2002 to 166,104 during the most recent audit in May)
  • All of that had an effect on the final product: Labor expenses — including journalists — dropped from $243 million in 2000 to $135 million a dozen years later.
  • Even with such cuts, the papers thus went from a $145.8 million profit in 2000 to losing more than $5 million in 2012.

"Nothing surprises me when it comes to our numbers being down," said Howard Gensler, the Daily News gossip columnist and president of the Newspaper Guild, which represents the journalists of IGM. "The value of the company shrank immeasurably from 2005 to 2012. My guess is the numbers prove that."

In some ways the story is no different than what happened nationwide: Advertising revenues plunged in the mid-aughts, driven by both the recession and free competition from websites like Craigslist. Audiences moved online — where the newspaper industry still hasn’t quite figured out to make a profit — leaving many newspapers with diminished print circulation even as they reached more people than ever before through the web. (Indeed, as the New York Times' David Carr notes in his latest column, Gannett, Tribune, and Scripps — three of the biggest media companies around — have recently decided to rid themselves of their newspaper properties.)

"It's across the board in the newspaper industry,” said Jim Conaghan, vice president of research for the Newspaper Association of America. “A fairly substantial change in a short period of time."

Still, there are reasons to believe that Philly’s newspapers suffered more than the industry as a whole during the time period.

  • Both Philadelphia and the national industry started seeing double-digit percentage drops in total advertising revenue starting in 2008 — when the recession set in — and continued that trend for several years. In 2010, 2011, and 2012, though, the industry’s losses became somewhat shallower, averaging in the single digits, while Philly posted losses of 12, 20, and 16 percent of total advertising during those years.
  • While circulation revenue has trended somewhat downward in recent years, industrywide, its decline has been nowhere near as fast as the drop in Philly: The industry as a whole reported $10.4 billion in circulation revenue in 2012 — down just about 1 percent from its $11.2 billion peak in 2003. As noted earlier, Philly’s circulation revenue declined much more dramatically — by nearly a third — since the report began.

Joe Natoli, who was chairman and publisher of the newspapers under the Knight Ridder regime that owned them through 2006, said The Inquirer may have taken a tougher blow than other papers because it had more competition in the suburbs than, say, the Minneapolis Star-Tribune, a similarly situated publication.

“It did OK in the city, but it was sharing market in the suburbs,” Natoli said. “That sort of weakened the enterprise.”

And Joshua Benton, director of the Nieman Journalism Lab, noted that mid-sized “metro” papers like the Inquirer and Daily News have been hurt the most by the industry’s recent travails — without the national clout of bigger papers (like the New York Times) and the audience loyalty of smaller, more local papers, the metros simply suffered.

“Nobody’s figured a way out,” Benton said, “because there probably isn’t a way out.”

What Happened?

Interstate General Media declined, through a spokesman, to make any executive available for this story. Philadelphia magazine attempted to contact some key figures from the different ownership groups that oversaw the dozen-year decline — including former publishers Brian Tierney and Greg Osberg, as well as Richard Thayer, the former vice president of finance under Tierney. None of them returned calls.

"Part of the problem has been not just a lack of quality management, but a lack of consistent management. From 2005 to 2012, we had, what was it, five owners?” Gensler said. “Everybody comes in and tries to undo what the previous person did. There hasn't been any stability in any of the decision making — whether any of the decision making was good or bad. I could say it's bad, but you don’t know how bad it is because two years later, there's a whole new team enacting a new strategy. While the universe was tanking, we couldn't figure out what to do about it."

Natoli was a Knight Ridder veteran: His company sold its newspapers to McClatchy — including those in Philadelphia — just before the plunge began.

"I think the changes in ownership have certainly not been helpful, they've been a distraction," Natoli said. "But the macro changes are not that different from what you'd find elsewhere."

The problem — in Philly and elsewhere — is that print advertising has declined radically, but also remains the revenue backbone of the papers. In 2012, for example, circulation revenue in Philadelphia exceeded print advertising for the first time — $81 million to $78 million — but that $78 million still represented a third of the company’s revenues. (Digital advertising wasn't even tracked by the company in 2000; in 2012, the $15.3 million earned from online advertising amounted to little more than 12 percent of the company's ad revenues.)

“The challenge is that no advertiser is moving market share into print advertising,” said Natoli, now the chief financial officer at the University of Miami. “That's a challenge if where most of your money comes from is losing share. That's probably not going to change. Technology has passed the printing press by."

Which leads some to suggest radical change is needed if the newsrooms are to survive. Neil Oxman is a Philadelphia political consultant and ally to former IGM co-owner George Norcross. Oxman’s firm did some marketing for the papers during Norcross’s reign, and Oxman was privy to some audience research commissioned for the papers during that time.

He particularly decried the “evolution not revolution” approach reportedly favored by Inquirer editor William Marimow.

"The Inquirer is still one of the 10 best daily newspapers in the country, period. The Daily News is one of the top three or four tabloids, period,” Oxman said. But he pointed to reports that Marimow had resisted using Norcross’s audience research to make sweeping changes to the Inquirer. "I think that's incredibly arrogant,” Oxman said.

Marimow would not talk to Philadelphia magazine for this story. Daniel Rubin, the Inquirer’s deputy metro editor for enterprise, said Marimow had spent the revenue decline years defending the integrity and aggressiveness of the paper’s journalism.

"He insulated us from the ticking of the clock in a way that lets us do the best version of the story,” Rubin said. Under Lenfest’s ownership, he said, “we have the opportunity to figure out how to get the most out of what we've done, instead of fighting among ourselves. And that's what we're going to do."

Of Oxman and his relationship to Norcross, Rubin added: "I think Neil Oxman is still fighting the last war. Which his side lost, by the way."

A Way Forward?

Reinvention will probably be difficult. Benton, at Nieman Journalism Lab, didn’t speak directly about the Philadelphia experience. But he suggested that newspaper executives should change their approach to meet the changing expectations of both the audience and advertisers. That could mean delivering quick content for some readers; in-depth content for others, something else entirely for other readers.

"Quality means a lot of different things to different people,” Benton said, but added: "Speaking broadly, I don't think building a really good version of a 20th century newspaper" will work.

Conaghan of the Newspaper Association of America offered a slightly optimistic outlook. The web, he pointed out, had grown the audiences of newspapers dramatically, even if many of those audience members aren’t paying print customers. Indeed, IGM routinely boasts that its print and web publications reach 1.7 million audience members in an eight-county area surrounding Philadelphia.

"Our financial picture is dramatically different,” Conaghan said of the newspaper industry. "The audience picture is better, has improved."

The difficulty, he said, will be to align new, smaller revenue streams with the cost of producing the news.

"I think it's really difficult for all media, including the online-only platforms,” Conaghan said. “Some of the biggest online-only names out there aren't necessarily boasting profits. They haven't settled their own financial situation."

Benton sounded a similarly grim note.

"There are plenty of ways to make money online,” he said. “They just tend not to be at the scale a metro like the Inquirer is accustomed to."

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  • DTurner

    I can’t see a future for the Inquirer, they refuse to adapt and Newsworks can and will eat its lunch when it comes to local coverage. I really tried to become a regular reader when I moved back to the area, but the content just is not there, save for Inga’s excellent work, on both the digital and paper fronts.

    • Hilters back in SJ

      God took the paper from reckless hands that wanted to use it to harm good people

      God is going to take more from that reckless machine

      Let it go George! This is what happens when you take from others who youve hurt

      God is coming to take you down

      This is just a taste

    • Megan

      Your right, Norcross has NO Future in the Inquire, DTurner. It’s over, done, finished. He should know how that works, He’s caused alot of damage to others and now he was nixed. Norcross LOST THE GAME.

      • DTurner

        Uh, what? I never mentioned Norcross. I think the Inquirer itself has no future in this city.

  • The Real Richard Cranium

    We have the Daily News, Inquirer, and Metro on an almost daily basis. You throw the City Paper and Philadelphia Weekly into the mix and you have five publications that are offering at least a product on a weekly basis. The market for this time is just too saturated when it comes to newsprint. The Daily News and Inquirer need to fold into one paper and bring top quality journalism.

    I don’t read the paper, but their digital platform ( is in need of a serious retooling. It is almost like they don’t fact check or proofread their articles, so you end up getting a bad product. Way too often, I have emailed or tweeted the columnist and ask for clarification or to clean up the massive amount of grammatical and spelling errors. And just as often, I have written to offer kudos to good work.

    And finally, you can find out breaking news more quickly on this site or any of another dozen or so sites before even makes mention of it.

  • Reader

    They need ONE physical paper and ONE website (not two physical papers and three websites). And they need to fact check and proof read all articles for accuracy, spelling, and grammar – something that obviously isn’t happening now. Finally, they need to stop being so biased to the point of representing opinion as fact. Quality must improve now.

    • Martin Act

      Now that Norcross and his Daughter are gone, people no longer have to worry about being defamed and destroyed by a biased machine that used click baiting and back linking to hurt people via the news. Integrity has been restored in the newsroom and We Love PHILLY.COM once again. Lenfest should surround himself with trusted people and make sure there are no leaks in the newsroom. He needs to keep people around him that can be his ears and eyes and have the computers and building checked for bugging devices and other methods of hacking that could have been placed in the newsroom. Those were not normal people working there.

      They need to expose Norcross and the corruption in South Jersey. They use to do this long before he got involved in the Newspaper business and it worked. People want to see Norcross go down and writing about the corruption and his cronies will sell BIG in the paper sales. People are tired and have no one stopping this corrupt figure. They need to start reporting the pay to play and kick back deals that have been covered up and hidden in South Jersey’s bedroom communities. It’s time for exposure. Now that the beast is gone, they should get reporters who are not afraid and not in any kind of relationship with that past owner. Perhaps find people abroad that do investigative reporters who are accurate and will find truth in the coverings of this corruption in NJ. Have a South Jersey Political Corruption Section. That will bring your sales through the roof, especially if it exposes Norcross and his cronieis. There is a lot to report of South Jersey Corruption. Be the newspaper to take him and his cronies down.

  • Finch

    I would subscribe but their liberal BS is too much for me

    • JeffWest

      Their “liberal BS” is more than offset by the complete insanity of their comments sections.

      • Jeff

        I disagree. Integrity has been restored now that a couple of troublemakers have been outbid and removed. It’s sad that Katz passed away and was not able to reap the benefits of this fine newspaper. God bless him and his family and God bless the Philadelphia Inquire. I pray that no weapon formed against it will prosper.

  • Enuf already

    if they want a comeback and to be successful, catching the public interest they need to return to true journalism. Report the truth, the facts not bias, twisting the truth and a focus on sensationalism. Journalists used to take pride in their jobs, they were part of the process to keep the government, the politicians, corporations honest. They asked the hard questions, reported the truth to the public so that we could make informed decisions that affected us, our families, our present and future.
    I know I would again start to subscribe were this to happen. As it is now, its no better than those cheap gossipy papers at the checkout counter.

    • Martin Act

      Now that Norcross is gone, the truth has returned. That was the nucleus to the problem.

      • Jeff

        Norcross’s Daughter was the one who bought that cheap gossip to the paper. It was clear and factual. We saw proof on that.

  • Martin Act

    The Major decline was because of two people – George and Lexie Norcross who bought a bunch of Drama and Misery to the newsroom. These are toxic people who will stop at nothing to interfere in destroying innocent peoples lives. If they can not control or be in control of a person, they begin their UNDERMINING and DRAMATIC STUNTS. These are evil, devilish individuals who earned the reputation of being off springs of the JERSEY DEVIL. Since they are now gone, we have many people who will be subscribing to the paper again.

    • Robin Nickelson

      Couldn’t agree more. Planning to subscribe now that the drama king and queen are gone.

      • Huh?

        You both appreciate that this story shows the decline happened before the Norcrosses were involved in the paper, right?

        • Hilters back in SJ

          Wrong! It got worse when Norcross took over

    • former newspaper executive

      It is naive to think that an owner and his daughter would cause all that revenue decline despite their perceived negative impact. The average reader barely knows who the owner of the newspaper is and media buyers could care even less. The revenue decline can be attributed to all the reasons the writer states in the story.

      • John

        The former owner and his daughter didn’t help. They added Drama that cost the company money, frustrated workers and lowered the Morale in the company. If the Former owner and his daughter would have concentrated on working with others as a team rather than going to the inquire to take over like he did South Jersey, the mood and ideas of that paper could have been successful for everyone. What the former owner does is demand people get FIRED. This has been his history and his habits for over a decade, starting with that solicitor from Palmyra. Had Christie done his job and not made a deal, we wouldn’t have seen a repeat with Marimow. The former Owner aka Norcross enjoys having people FIRED. Hopefully he got a taste of his own medicine when his daughter Lexie was Fired from the newspaper. Karma always falls back on it’s offspring. This is why you should treat people fair and never seek vengeance on someone, NEVER. Norcross lost a lot and until he gets it, a lot more will be lost in his life. If your reading this George, I suggest you start doing right by the people you hurt to avoid any future failures that God has in store for you and your family. God can do anything and that includes stopping Donald from becoming a Congressman and MAKING YOU SICK AGAIN. You caused a lot of people pain and you need to fix it before it is too late for you. Consider yourself Scrooge. He did the right thing and was spared in the end. Try it, maybe you’ll see things turn around for you, if not, don’t expect them to get better. Let Lexie, the Newark Loss, Cancer and that Protest be an example of what’s to come. Stop hurting people. Use your riches to help those in need and help those who you punished. God will turn things around for the Inquire. They have suffered enough under the Norcross Regime. Don’t let God have your old friend named Cancer come back. Tell Steve he is on the radar and cyber crime is a felony.

  • Jeff

    Glad the comments have been restored. A newspaper should not be a dictatorship and that is what it had become when Norcross was part owner. He clearly used the paper to divide and destroy people who he was seeking vengeance on. It’s factual. I was pleased to learn that good prevailed over evil and that Katz/Lenfest won the bid. It seems like people have their freedom back again and they are no longer haunted by that nightmarish experience.

  • frank2411

    Who wants to continue to read “lap dog” reporting on all democratic platforms. The editorial board wears “horse blinders” all the time. No wonder there are such poor results.

    • Hilters back in SJ

      The dog and pony show lost the bid
      The problematic people are no longer involved with the paper. Sales will rise now

  • Theresa Winters

    We love how the Philly newspaper is right now, We love the new owner and the great editors and reporters who write with integrity and truth. God restored the Philadelphia Inquire with good, honest leadership. Thank you Philly Inquire, you are Number One!

  • sick and tired

    Doesn’t Philadelphia Magazine have anything else to report about? Isn’t this getting old? It’s not rocket science that circulation is on a decline for ALL newspapers.

    • John

      “Your sick because Norcross lost the paper and could Not carry out his wicked deeds against others

      God dont like Ugly

      • Megan

        Philadelphia Inquire and is Number one.

        Gannet needs to get rid of Norcross, the Courier Post is a disgrace now that Norcross is on the editorial board. It’s like working in a concentration camp.

        Everything this man touches falls apart. Look at Camden New Jersey which he controls. This is the Poorest City in the Nation and he runs it.

        Tells you a lot about his poor leadership and political retribution. The people need to wise up and help put this man in prison and Stop supporting him on every level.

  • John

    Philadelphia Inquire is one of the best reliable newspapers throughout the world

    The South Jersey section is the best. We need coverage in this area otherwise, people wont know the truth about all corruption in SJ that goes unaccounted for.

    Courier Post is horrible. Norcross sits on that board and that paper is Razor Thin. My friend was fired by one of Norcross’s hentchman.

    He said it is a dictatorship at the Courier Post

    Norcross uses that paper to compliment his cronies that are Crooked as heck

    This is the typical way he and his cronies control jobs, If you buck the system or speak out against him, hes got these trolls like that Steve A that set up social media sites and widgets to sabotage and defame your name

    Since Norcross controls SJ Police, Camden County Prosecutors Office, Courts, Judges and State AGs office, they are told to concoct a story, create a false crime and destroy that persons life and take their Job.
    All for political retribution

    Since Christie made a deal with Norcross to be President, he ignores the laws and obstructs justice and violates the color of law which is a Federal Offense, he did this when he was US Attorney with those tapes

    It must end. Holder needs to end all of this asap and get all of the Norcross brothers, Christie, Sweeney and there cronies indicted
    Forget their dirty money for fundraising. Much of which is Pay To Play and Misdirected funds

    Time to shut this operation down NJ has become the highest property tax state and the POOREST city in America under these evil men. A 12 year game of Christie allowing Norcross and Sweeney to abuse and Hijack NJ government and the Quality of Life. Its a nightmare in NJ and Nothing is being done, This can NOT continue

    Christie lost respect from a lot of people
    He made his bed and he will have to face the consequences for making poor decisions

  • AceyDucey

    Quality has suffered on with “producers” writing about NOTHING

    Sports especially. Its like they have these young college interns pretending
    to be authorities on subject matters

    • Megan

      Get over it. Lexie got fired. No more click bait and Trash Stories on She did some shady stuff when she worked for the paper. She better hope the US Justice Department doesn’t have her under investigation for Cybercrimes.

      Norcross and his daughter need to let it go and move on. Go build yourselves up on the Courier Post. That’s what your daddy does best. Maybe his Prostestors will show up soon in front of the Courier Post and demand he step down from the editorial board of the Courier. I heard the people of SJ are planning a rally to get him off the board. Nobody wants to do business with Norcross, except his Indian Crony

  • John

    Check this link out below. Norcross using the Courier Post again to defend himself against the money he stole. Article says he done a lot for South Jersey. He sure has, as someone stated, he Created the Poorest City In America and he sure did with Camden NJ, that is a fact.

  • Megan


  • Tzvika Gottlieb

    It is sad news.. But there can be a bright future for the paper, if it learns to offer new “layers” of content/add-ons on the news. Its not enough for print just to report news anymore. Here is a type of layer, The Hybrid Journalist:

  • Jeff Share

    Odd how what goes around comes around, as the saying goes. Newspapers and other businesses that benefited greatly when the competition went under are now in the same predicament. Its happened here in Houston just like in Philly and other cities around the country. As a society we all lose from the demise of great journalism which means newspapers. For journalists who still haven’t made the move to something with a future, what are you waiting for?