Inquirer Bailout Talks Raise More Questions

Member Group : Freindly Fire

The Bulletin and other media outlets have recently disclosed ongoing discussions between Pennsylvania Gov. Ed Rendell, D, and Philadelphia Media Holdings (PMH) Publisher and CEO Brian Tierney. A possible taxpayer bailout of the struggling media company stands at the heart of the issue.

PMH bought the Philadelphia Inquirer and Daily News in 2006 for $562 million, and approximately $400 million remains in debt. The company is in default because it has not made a payment on its loan since June of last year.

There has been significant public opposition to a media entity seeking financial support from the government, including a Wall Street Journal editorial labeling it "the worst bailout idea so far."

Despite this, the governor’s press secretary, Chuck Ardo, stated earlier this week that Mr. Rendell is still open to continuing the bailout discussions.

Complicating the matter are contradictory statements made by Mr. Ardo and Mr. Tierney.

According to a story on KYW News Radio, Mr. Ardo said there were discussions about state agencies renting space in the newspapers’ building.

Additionally, Mr. Ardo stated that some bailout conversations involved two of Pennsylvania’s large state pension boards, the State Employees Retirement System (SERS) and the Public School Employees Retirement System (PSERS).

"I don’t know the specifics of the conversations, but the governor did suggest that Mr. Tierney speak with the pension boards to see what kind of arrangements could be worked out," Mr. Ardo was quoted as saying on KYW.

Mr. Tierney made a contradictory statement, according to the news radio website, by claiming that discussions did not involve the use of pension fund dollars to buy any of the papers’ debt.

Yet according to a Jan. 31 article in the Inquirer, "Gov. Rendell said he arranged a recent meeting between the publisher of The Inquirer and Daily News and the two largest state employee pension funds in hopes of helping the newspaper company lessen its large debt burden."

The article elaborated on the bailout discussion timeline, stating that Mr. Tierney "…said that he first sought Rendell’s help about a year and a half ago. He wanted to see if there were any state agencies interested in moving into The Inquirer and Daily News Building."

Mr. Tierney then approached the governor "to determine what, if any, economic-development funds were available from the state. As a result of those discussions, Rendell set up a meeting last autumn between the publisher and the pension funds."

A spokeswoman for PSERS told The Bulletin that the pension board did not invest in companies such as Philadelphia Media Holdings, and was unaware of a leasing arrangement of PMH office space.

State Rep. Robert Godshall, R, Montgomery, who serves as a Board Member of SERS, told The Bulletin he too was not aware of any investment in PMH.

The Inquirer declined to comment, while calls from Ardo were not returned as of press time.

Chris Freind can be reached at [email protected]