The Fight for the Future of Philadelphia’s Newspapers

Two years after they teamed up to buy the Philadelphia Inquirer and Daily News, power players George Norcross and Lewis Katz are at each other’s throats amidst firings, broken agreements, accusations of meddling and a protracted court fight. The inside story of a deal gone bad—and a feud that once again puts Philadelphia’s newspapers in peril

CRASH OF THE TITANS Clockwise from upper left, Lexie Norcross, Bob Hall, Bill Marimow, Nancy Phillips, Lewis Katz and George Norcross.  Illustration by Britt Spencer

Clockwise from upper left, Lexie Norcross, Bob Hall, Bill Marimow, Nancy Phillips,
Lewis Katz and George Norcross.
Illustration by Britt Spencer

The meeting is lore, now: a story about a table for two that likely caused all South Jersey to wobble, ever so slightly, on its axis. The setting: Lamberti’s, aflutter with white tablecloths, occupied by the swellegant, an Italian seafood restaurant that serves as something of a home field for one of the men at the table, George Norcross III.

His name means different things to different people. Norcross earned millions in the insurance business, as executive chairman of Conner Strong & Buckelew. He earned a scary reputation as the grinding stone of the Democratic Party in South Jersey, choosing who ran for what political office till he accumulated so much wealth and power that he became downright kingly.

Critics plaster Norcross with uncomplimentary terms, like “the Jersey Devil.” Admirers cite his more recent run of philanthropy, thanking him for building a better South Jersey. Friends and enemies often see his avalanche of thick white hair at Lamberti’s, in Cherry Hill, but the 57-year-old Norcross added this March 2012 stop to his calendar upon request, and reluctantly. He would maybe order a bowl of linguine or something.

Across from him sat Lewis Katz. His name also means different things to different people: An entrepreneur of many trades, Katz has worked, successfully, as an attorney, a political power broker to governors Jim Florio and Ed Rendell, a shareholder in the New York Yankees and New Jersey Nets and Devils. But he made his biggest bundles of loot in comparatively schlubby businesses like parking lots and billboards. Tall and trim, with thinning hair he combs over a wide bald spot, Katz was the one who called and asked for this meeting.

Critics plaster Katz with invective, too, citing his vanity, his operatic ego, his success at leveraging political connections into cash. Admirers cite his philanthropy, including a recent $25 million gift to Temple University, and say that at 72, he is doing it right at the end, ladling wealth on good causes.

In what is likely the most accurate rendering of this encounter, Katz spoke first: “George,” he said, “I am not sure you’re comfortable with this deal. And I want you to be comfortable, George.”

Katz and Norcross were deep into their run at buying this city’s largest media organization: the Philadelphia Inquirer, Daily News and Norcross took in Katz’s opening salvo, the reason he had been called here to eat linguine for which he was not particularly hungry, and responded, “I’m comfortable. I’m moving ahead with this deal. But I think you’re uncomfortable. … ”

Was Katz trying to avoid the embarrassment of queering the deal by getting Norcross to bail first?

“George,” Katz told Norcross, “I just want to be sure you keep the passion I’ve seen in you throughout this deal. I don’t want to be that heavily involved, and I just want to be sure you’ll make it work.”

“I’ll make it work,” replied Norcross.

Less than two years later, the business pairing of Lewis Katz and George Norcross looms as a master class in how things fall apart. Neither man recognized that this moment at Lamberti’s forecast worrisome levels of indecision and mistrust. And so this is a story about how one brief dinner foreshadowed a dessert of legal briefs and lawyers’ fees.

The two men bought into a business deal for very different reasons: Katz for romance, nostalgia, love; Norcross for money, power, challenge. The different perspectives meant each man had a different view of the path ahead. And the result is Philadelphia’s highest-profile feud in years, featuring two men who can’t abide losing in a battle for a prize that relinquishes a little more luster with every lawsuit.

“None of this makes sense anymore,” says a local businessman who has known both men for decades. “Because it isn’t about business. It isn’t about money. It’s all ego now. It’s face.”

“DARLING,’ THE EMAIL BEGINS.The sender, Nancy Phillips; the recipient, Lewis Katz; the date, March 17, 2012, as Phillips goes on to elucidate a comprehensive strategy to turn around the Inquirer.

“Company needs a new publisher,” she writes.

“Paper needs a new editor.

“ needs a new leader.

Daily News has to be seriously evaluated with a view toward possible elimination or curtailment as in a move to the website with pared down staff and a paper product one day a week if at all.”

At the time, Phillips worked in the newsroom of the Inquirer as a reporter. And in roughly two weeks, George Norcross III would close a deal with her boyfriend, Lewis Katz, to acquire the desk, the chair, the whole shebang that was her workplace. In this sense, Phillips’s letter was business advice, a “honey do” list, and the fantasy of any working stiff made manifest.

In 10 paragraphs, Phillips advised Katz to fire or demote and replace six people: her boss, editor Stan Wischnowski; publisher Greg Osberg; chief Wendy Warren; and the COO, the CFO, and the head of the advertising department. She also alerted Katz to Mark Block, “the lovely PR guy,” because she’d just noticed he held a VP title and probably made too much dough. “Maybe he plays a larger role that I don’t understand,” she wrote.