6 Burning Questions About the New Owners of the Inquirer and Daily News

Attorney Richard Sprague, left, advised Lew Katz, center, and Gerry Lenfest on their bid to control the Inquirer and Daily News.

Attorney Richard Sprague, left, advised Lewis Katz, center, and H.F. “Gerry” Lenfest on their bid to control the Inquirer and Daily News.

Now that the Inky ownership battle has been resolved in favor of Lewis Katz and H.F. “Gerry” Lenfest, the guys we used to refer to as the “minority ownership faction” of the Inquirer, Daily News, and Philly.com — we’ll just refer to them as the “owners” from now on — we’ve got a few burning questions about the future of the newspapers

•Does anybody know what to do next? Sure doesn’t look like it. As soon as Messrs. Katz and  Lenfest presented themselves to the media, reporters questioned them about the future of the papers: Who will be publisher? How to address declining circulation? Will there still be three websites? How to address declining revenue? What’s the plan?

The plan, reporters were told repeatedly, hasn’t been developed yet.

“We have to figure out the future,” Lenfest said. “We’re not there yet.”

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Katz, Lenfest Winners of Inquirer, Daily News, Philly.com Auction

Philanthropist H.G. "Gerry" Lenfest, left, and businessman Lewis Katz arrive for a closed-door auction to buy the The Philadelphia Inquirer and Philadelphia Daily News Tuesday, May 27, 2014, in Philadelphia. Katz and Lenfest are taking over Philadelphia's two largest newspapers with an $88 million auction bid. AP Photo | Matt Rourke

Philanthropist H.G. “Gerry” Lenfest, left, and businessman Lewis Katz arrive for a closed-door auction to buy the The Philadelphia Inquirer and Philadelphia Daily News Tuesday, May 27, 2014, in Philadelphia. Katz and Lenfest are taking over Philadelphia’s two largest newspapers with an $88 million auction bid. AP Photo | Matt Rourke

Joel Mathis is on the scene of the auction of the Inquirer and Daily News, where it’s just been announced that the group led by Lewis Katz and H. F. “Gerry” Lenfest has emerged victorious with a winning bid of $88 million. We’ll be updating this post throughout the day.

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Judge: Media Will Be Shut Out of Newspaper Auction

Make of this what you will: The media will be shut out of next week’s auction of the Inquirer, Daily News, and Philly.com.

The “closed” auction will take place between two current factions of ownership — the majority faction led by George Norcross and the minority faction led by Lewis Katz. It was Katz that asked for the auction to be shut off from the prying eyes of, well, his own employees. On Tuesday, the Delaware judge overseeing the auction agreed.

However: The judge also ordered the the identity of the prevailing party and the identity of the prevailing bid should be made public. Since Norcross will open bidding at $77 million, we’ll at least have enough information to know if the Katz group made a bid.

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Will the Media Be Shut Out of the Inky Auction?

George Norcross (left) and Lewis Katz in court late last year. AP Photos | Matt Rourke

George Norcross (left) and Lewis Katz in court late last year. AP Photos | Matt Rourke

Ralph Cipriano at BigTrial.Net brings us all the details of the auction that will determine the future of the Inquirer, Daily News, and Philly.com. It’s scheduled for 9:30 a.m., May 27th, at the law offices of Dechert LLP in Philadelphia. George Norcross, who represents the majority faction of owners that triggered the crisis last fall by firing Inky Editor Bill Marimow, will open the bidding at $77 million.

After that, the group led by Lewis Katz will have exactly 10 minutes to make a bid exactly $1 million higher. As Cipriano observes: “It could all be over in 10 minutes if Katz and (Gerry) Lenfest don’t bid $78 million.”

There’s just one dispute left to resolve, and it contains no small amount of irony given the stakes: The two sides can’t agree if the media will be allowed to cover the auction directly, or if reporters will have to sit outside and wait for the results. Katz’s group wants the process closed; Norcoss wants it open. The issue may be decided at the last moment, before the auction gets under way.

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Judge to Inquirer Owners: Let’s Have Us an English-Style Auction — You Have a Month

George Norcross (left) and Lewis Katz in court late last year. AP Photos | Matt Rourke

Inquirer ownership partners George Norcross (left) and Lewis Katz in court late last year. AP Photos | Matt Rourke

And there you have it. In a ruling issued on Friday, Vice Chancellor Donald F. Parsons of the Court of Chancery of the State of Delaware has decreed that the warring partners in Interstate General Media — the company that owns the Philadelphia Inquirer, Daily News and philly.com — will have a private auction among themselves to determine who will own the operation going forward. And that it must happen right quick:

… I will order the dissolution of IGM. In addition, I will order IGM to be sold in a private, “English-style” open ascending auction between General American and Intertrust. The minimum bid for the auction shall be set at $77 million in cash. I hereby direct General American and Intertrust promptly to confer and submit a proposed form of order implementing these rulings consistent with the other terms of the proposed private auction that were discussed at the conclusion of the evidentiary hearing and during the final argument on April 24, 2014. I further order that in no event shall the auction for IGM be held later than May 28, 2014; that is, no more than thirty calendar days from, and inclusive of, Tuesday, April 29, 2014.

So, imagine the kind of auction you see on TV: a fast-talking auctioneer and bidders who raise paddles or wink or make little shooting gestures with their hands when they hear a number they like. Now imagine that there are just two guys doing the bidding: George Norcross and Lewis Katz.

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Newsroom Shaken by Norcross Campaign Solicitation

This is what inevitably comes of having a political boss as a newspaper owner, perhaps: The newsrooms of the Inquirer and Daily News are again restless after some reporters received a campaign fund-raising letter from one of the paper’s co-owners, South Jersey political boss George Norcross.

Norcross’s spokesman, Daniel Fee, said the solicitation was inadvertent and wouldn’t happen again. Nonetheless, the Inquirer reports:

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Inky Mess: Karen Heller Vs. George Norcross’s Spokesman

Another week, another rumpus in the Inquirer newsroom.

This time, it involves longtime Inky columnist Karen Heller and Daniel Fee, whose strategic communications firm, The Echo Group, handles public relations for George Norcross, the South Jersey political boss and part-owner of the company which owns the Inquirer. When Norcross has communicated with the newsroom, it has often been through emails that have gone out under Fee’s name.

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While Owners Feud, Inky and Daily News Suffer

Morale is busted, advertisers uncertain, and Philadelphia’s newspapers are edging closer to another bankruptcy, lawyers for the papers’ feuding owners said in documents filed with the Delaware court that will revolve the fracas.

Ralph Cipriano reports at BigTrial.net that the Inquirer’s feuding ownership factions have filed their proposals on how to dissolve their partnership and sell the paper—along with the Daily News and Philly.com—to a potentially new owner.  The dire state of the newspapers was detailed in those documents. Cipriano quotes P. Clarkson Collins, a lawyer for the ownership faction led by George Norcross, who said the deadlock has delayed the hiring of new key personnel for the newspapers and website.

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