UPDATED: Norcross, Majority Owners Offer $29 Million to Buy Out Newspaper Partners
[Update: 4:02 pm] Newsworks reports that Lewis Katz has rejected Norcross’s buyout offer. “Katz summarily rejected the notion in a brief telephone interview, but indicated he’d be open to an idea proposed by the Newspaper Guild that the warring sides bring in an “impartial industry expert” to run Interstate General Media, the company that owns the Inquirer, Daily News, and Philly.com.”
Meanwhile, Bill Ross, executive director of the Newspaper Guild that represents journos at the Inky, DN, and Philly.com, sought to dispel any notion that the union might be taking sides. “The Guild is neutral in this dispute. The press release [from Norcross’s group] says they seek to have the Guild as their partner. At this time we have not been approached, nor have we made any offer to partner with either side. We just want this dispute settled. ”
[Original 2:17 pm] Are we in the end game to the war between the owners of the Inquirer, Daily News, and Philly.com? Maybe. One day after the Newspaper Guild offered to broker peace by bringing a new partner to the table to buy some or all of the opposing partnership factions out, the majority faction of owners—which includes Jersey political operative George Norcross—has announced its offer to buy out the minority faction for $29 million. The minority faction includes Lewis Katz and Gerry Lenfest, who are suing their partners over the firing of Inky editor Bill Marimow.
“More than two-and-a-half years ago, when we first met to discuss purchasing the papers and philly.com — a group that did not at the time include Mr. Katz — we did so because we saw clearly troubled journalism properties of great value and importance to the community,” said today’s statement from the majority faction. “In 18 short months, we have reversed the direction of the company, taking it over when it was losing almost $50,000 a day, every day, to being on the path to profitability today. That turn-around is due in large part to the hard work and sacrifices of the employees of the company, investments in our infrastructure and a dramatically improved home delivery revenue. As we made clear when we purchased the company, we have always been in this for the long-haul.”
The statement said the majority would wire $29 million to the minority partners within 24 hours of an agreement.
The full statement from Norcross and William P. Hankowsky, another member of the majority faction, after the jump.
FOR IMMEDIATE RELEASE:
October 30, 2013
PHILADELPHIA: Today, the majority owners of Interstate General Media
(IGM), who together hold 58 percent of the company and represent four
of six directors, announced they are offering to purchase the minority
share of the company owned by Lewis Katz and Gerry Lenfest in order to
end the current dispute between the groups and provide stability to
The following is a statement from George E. Norcross, III and William
P. Hankowsky, two of the majority owner group of IGM.
“We did not want or initiate the litigation that has created a
sideshow that will ultimately waste hundreds of thousands, if not
millions, of dollars in legal fees that could be used to further the
strengthen and build the company. We are, however, prepared to end it
by purchasing the minority share of the company owned by Messrs. Katz
and Lenfest for immediate cash, with no strings attached.
We are offering to purchase their shares for $29 million, which
represents a nearly 12 percent profit over their investment in just
over 18 months, not a bad return this economic environment. We will
wire the funds to their accounts within 24 hours of an agreement.
We will seek to have as our partners in this effort the newspaper
Guild, which represents staff members at the Inquirer, Daily News and
philly.com. We believe it is good for the company to have the
interests of its leaders and professionals workers aligned. We are
pleased that in their public comments, the Guild has recognized that
our majority ownership group not only better understands the
operations of the company, but that we have a clear path forward.
More than two-and-a-half years ago, when we first met to discuss
purchasing the papers and philly.com — a group that did not at the
time include Mr. Katz — we did so because we saw clearly troubled
journalism properties of great value and importance to the community.
In 18 short months, we have reversed the direction of the company,
taking it over when it was losing almost $50,000 a day, every day, to
being on the path to profitability today. That turn-around is due in
large part to the hard work and sacrifices of the employees of the
company, investments in our infrastructure and a dramatically improved
home delivery revenue. As we made clear when we purchased the
company, we have always been in this for the long-haul.
As our employees know, when we purchased the company we undertook
significant market research that showed not only do the three
properties not materially compete with each other, they reinforce each
other. Together, the Inquirer, the Daily News and philly.com reach an
average of 1.95 million readers each week, more than double any other
local media property. The papers and philly.com are the undisputed
news leader in the area and one of the biggest journalism
organizations in the country.
It is time to end this impasse and litigation and return our focus to
continuing the remarkable turnaround of the Inquirer, Daily News, and
philly.com. It is the right thing to do for the company, our readers,
our workers, and the community.”