[TBO] A closed-door auction was being held Tuesday to determine the future of Philadelphia's two largest newspapers, which were being sold for the fifth time in eight years.The latest sale of The Philadelphia Inquirer and Philadelphia Daily News comes less than two years after wealthy city powerbrokers bought the struggling newspapers at the urging of former Gov. Ed Rendell.
Businessmen George Norcross and Lewis Katz led the $55 million purchase, but they soon became locked in a power struggle over newsroom leadership and coverage strategies. They are going head-to-head Tuesday to buy each other out, with the bidding starting at $77 million. That's a relatively high price given the company's recent earnings but is designed to repay the investing partners in full.
Norcross is one of the most powerful figures in Philadelphia's southern New Jersey suburbs, with interests in media, health care, education, banking, insurance and politics. He would steer coverage toward more local news and sports, according to his testimony at recent court hearings over the partnership dissolution.
Katz made his fortune investing in the Kinney Parking empire and the Yankees Entertainment and Sports Network in New York. He supports the investigative reporting favored by current Inquirer editor Bill Marimow.
The increasingly bitter feud became public last fall when Marimow was fired. Katz sued, charging that Norcross needed his vote to make the move, and a judge agreed. Marimow returned to the newsroom, but his contract expired last month. He would likely be gone if Norcross prevails Tuesday.
The animus between Katz and Norcross could help push the sale price higher, given what takeover experts called "the testosterone effect" of live auctions.
Norcross holds a 52 percent stake in the company. Katz holds a 26 percent stake and his ally H.F. "Gerry" Lenfest, a local philanthropist, a 16 percent stake.