More Layoffs Likely As Value Of Philadelphia's News Dailies Plummets
By Steve Tawa
PHILADELPHIA (CBS) -- Senior managers who run the Philadelphia Inquirer and Daily News envision cutting even more jobs, to cut payroll and clear the deck for potential new owners.
A document that outlines the terms of a potential sale of the company includes more jobs cuts over the next six months.
A source who has seen the letter of intent, dated March 20th and signed by local businessmen George Norcross and Lewis Katz, puts the purchase price at $60 million.
The consortium of hedge funds and other institutions that now own Philadelphia Media Network bought it for $139 million in 2010, after they outbid a group headed by former publisher Brian Tierney, which paid $515 million in 2006.
No other names were on the document, so it's unclear who the other "interested parties" are in the local investor group that has the exclusive right to negotiate a possible purchase.
During a recent presentation by senior managers to the potential new owners, a source says the company indicated it would cut another 35 jobs over and above the layoffs and buyouts that recently eliminated 45 positions, mostly newsroom jobs (see related story).
The letter states those job cuts have cost Philadelphia Media Network about $900,000 in severance. But the letter does not get specific on where it would cut over the next six months.
It does have a set-aside provision for an additional $500,000 that would go toward severance for unnamed senior management officials.
