Bailout for the Inquirer?
A Discussion With Rendell’s Press Secretary
By Chris Freind, For The Bulletin
It is no secret the Philadelphia Inquirer and Daily News have severe financial difficulties.
The parent company of both newspapers, Philadelphia Media Holdings, has missed its debt payments since June, and according to Bloomberg News, the company is in "technical default" on its loans.
The papers were bought from the McClatchy Company in 2006 for $562 million.
Based on numerous factors, including fewer customers and declining advertising revenue, media entities nationwide have experienced significant volatility. Making the situation even more precarious is that, even for established newspapers, obtaining financing to continue operations in these market conditions is difficult, if not impossible.
The Tribune Company, owner of the Los Angeles Times and the Chicago Tribune, has filed for bankruptcy protection, as has the Minneapolis Star-Tribune. The Rocky Mountain News, strapped with large debts, could be permanently closing its doors, while the Seattle Post-Intelligencer has announced it will cease publication. The competing Seattle Times also is in danger of closure.
And The New York Times, because of its need to ease cash flow problems, is borrowing $225 million against its Manhattan headquarters via a sale-leaseback deal. Additionally, the Times borrowed $250 million from Mexican billionaire Carlos Slim, at a 14 percent interest rate. Mr. Slim will eventually become the largest single shareholder in the Times, owning up to 17 percent of common shares in the company.
After it was reported that Inquirer publisher Brian Tierney has been engaged in discussions with Pennsylvania Gov. Ed Rendell, D, about obtaining a $10 million government bailout for his newspaper, the Bulletin spoke with Chuck Ardo, the governor’s press secretary, for clarification.
The Bulletin: It has been reported that Inquirer publisher Brian Tierney has approached Gov. Rendell for a $10 million bailout for the newspaper.
Did that conversation take place?
Chuck Ardo: The governor and Brian Tierney have had a number of conversations over the course of the last several months. The governor has made no commitment as a result of those conversations.
TB: Is the bailout something that is still on the table?
CA: He would certainly be open to discussions with Brian, but we need to look at the situation that we are in economically and financially, and I think any discussions have to be seen through that prism.
TB: If the governor were to say, "Sure, we’ll do it," from where would the money come?
CA: If the governor was persuaded to the wisdom of helping Philadelphia Media Holdings, the money could come from a number of revenue streams. It’s hard to say, and would depend on what kind of help they would need.
TB: Would that require legislative approval, or would it come from the executive branch?
CA: There are ways that the executive branch can do this without need for legislative action.
TB: Would the money be a grant or a loan?
CA: It would depend on what the discussions might lead to. But as of now, no commitment has been made at this point.
TB: It’s one thing when the government becomes involved in car companies and banks, but how do you think the public would react to a media company seeking and receiving government bailout money from Gov. Rendell? Can it truly be viewed as objective and unbiased in its political reporting?
CA: The entire concept of a democracy depends on an informed public. Newspapers are a critical source of information, so there is a fundamental need for newspapers to continue to provide that information to the public. Now whether that information rises to the level of triggering help from the commonwealth, is something we’ll have to wait for the future to unfold. "
Chris Freind can be reached at [email protected]