Creditors to Take Control of Philly Newspapers

Publisher Brian Tierney says creditors have won the auction for Philadelphia newspapers with a $139 million bid.

Tierney says he won't fight the bankruptcy confirmation of the bid for the company that operates The Philadelphia Inquirer and Philadelphia Daily News.

The company is expected to emerge from the bitterly fought bankruptcy at the end of June after 14 months.

Tierney says the bidding by the local investment group led by Revlon chairman Ronald Perelman and his father had reached $129 million.

Tierney and others investors bought the company in 2006 for $515 million. He says he's optimistic creditors will run the company well.

Philadelphia Newspapers Inc., owned by Philadelphia Media Holdings LLC, filed for bankruptcy protection in February or 2009 amid a spate of such filings by newspaper companies.

"This restructuring is focused solely on our debt, not our operations," Tierney said at the time. "Our operations are sound and profitable."

The company has long sought to offset declines in advertising revenue and circulation with moneysaving moves and improved efficiency, including sharing editorial functions of the two papers' newsrooms.

The papers' emergence from bankruptcy comes as circulation continues to fall sharply at U.S. newspapers.

Figures released last week by the Audit Bureau of Circulations show average weekday circulation fell 8.7 percent in the six months that ended March 31, compared with the same period a year earlier.

Sunday circulation fell 6.5 percent.

Neither decline was as steep as the comparable one documented in the last reporting period. From April through September of last year, average weekday circulation dropped 10.6 percent and Sunday circulation fell 7.5 percent.