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Intrigue At Philadelphia Inquirer And Daily News Over Sale Of Newspapers

By Pat Loeb

PHILADELPHIA (CBS) -- Management concerns about the sale of the Philadelphia Inquirer and Daily News have spilled into the papers' coverage. In the past few days, stories about a potential buyer have been spiked and taken down from the website. In addition, a story that appeared in the paper on Saturday was altered, online.

The turmoil started on Monday when developer Bart Blatstein announced he had assembled a group of partners, calling itself Philly Hometown Media LLC,  interested in buying the papers. Angelo, Gordon and Alden Global-- major partners in Philadelphia Media Network (PMN), which currently owns the papers-- put their shares up for sale last month. Last Saturday, the Inquirer ran a front  page story by Andy Maykuth about local bidders led by former Governor Ed Rendell but sources say, on Monday, the Inquirer decided not to run a Maykuth story about Blatstein's interest.

On Tuesday, Daily News reporter Dave Gambacorta posted an item about Blatstein's group on his blog, "Clout." The post was removed and replaced by a statement from PMN saying it was not "in negotiations" with Blatstein.

At the time, PMN spokesman Mark Block said the company had the latitude to remove the post because it was on a blog but would not discuss the criteria used for the decision.

"It would be inappropriate to share an editorial conversation, which I'm not even privy to, as to why decisions are made on blogs, what should and should not be posted," he said.

He also differentiated between a blog post and a newspaper story online.

"If we were taking an article from the Inquirer or from the Daily News and we were going to have a byline there," he said, "then you're talking about a much different dynamic and you wouldn't be able to have that level of latitude."

He denied that PMN was censoring its own reporters.

"We just would not engage in that level of activity," he said, "because once you engage in that level of activity, you're going to constantly be questioned that you've done that."

It was later discovered that a paragraph from Maykuth's Saturday story about Rendell, disclosing that the company's earnings before interest are about $4 million, was excised online. Block said he would not comment on that.

Newspaper Guild president Dan Gross says both removing Gambacorta's post and editing Maykuth's Saturday story are contract violations.

"The contract stipulates that anytime there's going to be any kind of retraction of a reporter's material, that the affected individual would be consulted before any kind of retraction could  happen," Gross said.

He said the Guild had filed a grievance.

Blatstein declined to comment on the apparent hostility to his overture but a source familiar with the sale says he has been closed out of bidding. The source says the company managing the sale, Evercore, closed the first round of bidding last week and has no obligation to open it to another bidder, though it could accept another bid if it did not receive enough adequate bids to meet the seller's expectations.

Neither Evercore, Angelo, Gordon or Alden Global would comment. It's not known what other bids Evercore received, aside from the Rendell group's.

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