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Philadelphia Story

What Steve Taylor needs to know if he succeeds in buying the Globe
By ADAM REILLY  |  October 1, 2009

0910_philly_main1
The local-media story line of the moment is the push by Stephen Taylor — Milton resident, Yale media lecturer, and former BostonGlobe executive VP — to recapture the paper his family ran for more than a century, a goal he's pursuing with the backing of (among others) his cousin Benjamin Taylor, the former Globe publisher.

If Taylor succeeds, there'll be plenty of rejoicing, in Boston and in national media circles, about the restoration of local ownership at New England's dominant newspaper. The grim situation currently playing out in Philadelphia, though, is a potent reminder that localism only goes so far.

The parallel isn't exact. Philly public-relations bigwig Brian Tierney — who spearheaded the purchase by Philadelphia Media Holdings (PMH), LLC, of the Philadelphia Inquirer, Philadelphia Daily News, and philly.com (the Web site shared by the Inquirer and Daily News) back in 2006 — had a reputation for fighting dirty against the Philly media, including its dailies, which gave some journalists pause. (In one infamous case, an ex-Inquirer reporter blamed Tierney for successfully campaigning to suppress a story critical of the Archdiocese of Philadelphia.) What's more, he was a Republican activist and lacked newspaper experience.

Still, Tierney was a local guy. He talked a good game, extolling the importance of newspapers in general and the Inquirer and the Daily News in particular. Andhe was rescuing those dailies from the McClatchy Company, the California-based publishing group that had purchased the Philadelphia dailies' parent company, Knight Ridder, in March 2006, and then announced plans to flip a dozen of its new papers.

Consequently, there was a decent amount of optimism, inside and outside Philadelphia, about how Tierney and his fellow investors might fare. In a best-case scenario, the American Journalism Review suggested in 2006, Tierney and his team could "usher in a new era of vitality in the Philadelphia media and create a model for an industry in the throes of transition."

So much for that. In February 2009, Philadelphia Newspapers, LLC (PN), the operating subsidiary of PMH, filed for Chapter 11 bankruptcy protection. Tierney and his team are currently hunkered down in court, fighting to keep control of the Inquirer, the Daily News, and philly.com. Maybe they'll make a Rocky-esque comeback, but right now that seems unlikely at best.

Lessons learned
If the New York Times Co. does sell the Globe this fall, the grim state of the newspaper business means that the new owners will have precious little margin for error. So here, without further ado, are a few key lessons to be gleaned from Philly.

Don't overpay and don't over-borrow Tierney and his partners bought the Inquirer and the Daily News for $515 million, agreed to take on $47 million in pension liability, and funded the deal by borrowing upward of $350 million, which they soon found themselves unable to repay.

Some contend that Tierney, who led the purchase shortly before the economy went into a nosedive, was a victim of bad timing. "If they'd bought it six months later, they would have been in a much better position," says Alex Jones, director of Harvard's Shorenstein Center on the Press, Politics, and Public Policy and author of the newly released Losing the News (Oxford University). "They paid a price that no longer exists." (So did the Times Co., which in 1993 paid a whopping $1.1 billion for the Globe.)

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  Topics: Media -- Dont Quote Me , Media, Harvard University, Newspapers,  More more >
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