In Philadelphia, a journalistic experiment unfolds


On May 24, The Philadelphia Inquirer, the Philadelphia Daily News and the Web site were bought by a group of local business and civic leaders, ending 36 years of corporate ownership and possibly ushering in a new era of local control of major metropolitan newspapers. The new owners have no media experience.

In March, the 32 newspapers owned by Knight Ridder - then the parent company of Philadelphia Newspapers Inc. - were purchased by McClatchy Co. of California. McClatchy then turned around and put the Inquirer and the Daily News, plus 10 other newspapers, up for sale.

Joe Natoli, the publisher of the Philadelphia newspapers, has called the new arrangement "a laboratory for newspaper local ownership." The Inquirer's editor, Amanda Bennett, has called it "the great experiment." Former Inquirer editor Robert Rosenthal has called it "very interesting and very dangerous."

This is the first instance in recent memory of a newspaper moving from a corporate or a family-owned chain to private ownership. It could be one of the most significant developments in American newspapers in years.

The key question is whether the Philadelphia papers' new owners - who are some of the most powerful and influential members of the community - will exercise their stated commitment to the newspaper without trying to influence or manipulate news coverage to promote their own agendas.

Brian F. Tierney, the chief executive officer of the new ownership group and an advertising and public relations mogul, has a history of trying to stop the Inquirer from publishing stories. Tierney has pledged, however, that there will be no interference. He went so far as to require investment group members to sign a document honoring the newsroom's independence. The pledge was published on The Inquirer's front page, which Bennett pointedly presented to Tierney afterward.

Robert M. Steele, the chief ethicist at the Poynter Institute for journalism in Florida, said the new owners face the difficult challenge of balancing their business interests with the newspapers' public-service role. "This is ethical minefield territory," he said.

For The Sun and other American newspapers, hundreds of which are owned by companies that trade on Wall Street, local private ownership could mean a new kind of competition.

The private Philadelphia owners will not be under pressure from Wall Street to cut staff and news space the way Knight Ridder did for a decade or more in an effort to meet investors' demands for higher profits. Tribune Co. - which owns The Sun - and other newspaper chains have reduced budgets and staff at many papers in recent years.

But there are no guarantees that private, local ownership will produce a happy marriage of excellent journalism and business success. A strength of corporate ownership is the infrastructure and resources it provides for all facets of a newspaper operation: production, circulation, marketing, advertising, technology and journalism. Newsprint costs also are lower for corporate newspapers because chains can negotiate more favorable prices.

From the 1960s through the 1980s, many family-owned newspapers were purchased by growing chains such as Gannett, Knight Ridder and Times Mirror, which bought The Sun from the Abell family in 1986. In many instances the newspapers' content became less parochial and more ambitious - providing growing profits for their parent companies.

The increased use of computers in newspaper production produced big labor savings, and the demise of many afternoon dailies created advertising and readership monopolies. As newspaper chains consolidated and went public, their ample profits led investors to expect that such high margins would continue. When growth in newspaper profits eventually leveled off in the 1990s amid declining circulation, corporate owners began cost-cutting to keep earnings high.

Knight Ridder's years of budget and staff reductions took a serious toll on the quality, staff morale and readership at many of its newspapers, including those in Philadelphia.

It remains to be seen whether the Philadelphia group, which paid $562 million for the newspapers, will have the patience and skill to succeed in today's highly competitive media environment. But given the continuing financial uncertainty at many newspapers, the new Philadelphia company is an alternative business and journalistic model that bears serious watching.

Paul Moore's column appears Sundays. He was an editor at The Philadelphia Inquirer from 1982 to 1996.

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