Feeling Like an Orphan in Philadelphia

Karen Heller, a reporter and columnist at the venerable Philadelphia Inquirer for two decades, has lived through it all: the glory days of Pulitzer Prizes, the bloody budget battles with cost-cutting corporate parent Knight Ridder, the endless cycles of job losses and shrinkage.

“It’s like a soap opera that won’t end,” she said at her desk in the paper’s vast, lightly populated newsroom.

This week, there was another cliffhanger. Under duress from investors, Knight Ridder Inc. sold the paper and 31 other dailies for $4.5 billion Monday to the McClatchy Co. -- which promptly put the Inquirer, its sister tabloid the Philadelphia Daily News and 10 other papers on the auction block. Those 12 dailies are in markets with poor growth potential, McClatchy’s chairman said.

The Inquirer newsroom, already a stressed and anxious workplace, was left reeling. Reporters and editors spoke of feeling jilted and devalued; there were fears that any new owner would impose cost cuts even more onerous than those demanded by Knight Ridder.

It was the latest in a long line of indignities for a paper that still produces high-quality journalism but whose pared-down product invites unfavorable comparisons to its robust past.

The Inquirer was on everybody’s Top 10 list of dailies in the 1980s, when Time magazine declared it, on certain days, the country’s best example of daily journalism.

After the loss of 75 jobs four months ago, and against the steady drumbeat of circulation declines and dwindling revenue, the future seemed ominous this week to those left in the newsroom.

“It’s like coming in every day to the world’s longest funeral,” said national political writer Dick Polman.

The Inquirer is perilously adrift, said metro columnist Tom Ferrick: “Just a small cork on a wide Sargasso sea.”

The paper’s editor, Amanda Bennett, has tried to rally her staff. Just before the sale was announced, she issued a long memo listing the paper’s recent scoops -- among them an expose of cheating at a local school district and a report on lax port security.

The best way to attract a good buyer, Bennett has told the staff, is to continue to produce a quality paper.

In an interview, she said: “It’s a time of great uncertainty, but we are focused on doing great journalism for ourselves because we want to and for our readers because they deserve it.”

Education editor Rose Ciotta said she was so proud of the Inquirer that she was tempted to parade outside the building with a banner reading, “The Philadelphia Inquirer is a great newspaper with a talented staff.”

Ferrick overheard her and cracked, “Yeah, with a big ‘For Sale’ sign on it.”

The Inquirer’s economic woes are shared by every big city daily, including the Los Angeles Times. The Internet has lured away readers and advertisers. Faced with declines in revenue and circulation, owners feel increasingly obliged to cut jobs and expenses to meet investors’ demands for higher profit margins.

But pressures at the Inquirer surfaced earlier than at other papers -- in the late 1980s, when then-editor Gene Roberts fought epic budget battles with Knight Ridder Chief Executive P. Anthony Ridder. Roberts led the paper to 17 Pulitzers in 18 years before leaving in 1990.

The paper’s circulation is 357,000 daily and 715,000 Sunday; in the 1980s, it was more than 500,000 daily and 1 million Sunday. The newsroom staff has been trimmed to 425 from a peak of 721 in 1989. The operating profit margin of Philadelphia Newspapers Inc., publisher of the Inquirer and the Daily News, is about 14%, according to company insiders -- compared with 16.4% for Knight Ridder and 22.8% for McClatchy.

Possible bidders for the Philadelphia papers, and the other former Knight Ridder properties up for sale, include MediaNews Group of Denver, whose chief executive, W. Dean Singleton, recently toured the Inquirer and Daily News. Several Philadelphia-area investors also are interested, according to the Inquirer.

Also in play is a bid by the Newspaper Guild-Communications Workers of America, which represents workers at both Philadelphia papers and eight of the others for sale. The guild is partners with Yucaipa Companies, an equity group in Los Angeles that is controlled by billionaire investor Ron Burkle, a Democratic fundraiser who has a history of working well with organized labor.

Henry Holcomb, an Inquirer business reporter who heads the guild local and the Knight Ridder council of unions, said the union was interested in buying all 12 papers and setting up a privately held company to run them.

“We want to be a serious company that invests in the long haul,” Holcomb said.

Yucaipa, which owns Pathmark Stores Inc. and Aloha Airlines, “invests for the long haul. They have patient money -- and lots of it,” Holcomb said.

McClatchy’s chairman, Gary B. Pruitt, said the unwanted papers, such as the Inquirer and the San Jose Mercury News, “simply do not fit” with the company’s strategy of publishing in rapidly growing markets.

Those 12 papers are in markets where population growth is projected at 4.8% over the next five years, compared with 11.9% for McClatchy’s current papers and 11.1% for the other 20 Knight Ridder papers.

Jim Naughton, a former Inquirer executive editor who also has served as president of the Poynter Institute, which studies journalism issues, said selling off the 12 papers was a mistake.

“McClatchy has a golden reputation among journalists, but now it’s screwed up at its first opportunity to show it can handle the big time,” he said.

Even with its revenue problems and vigorous competition from smaller dailies ringing Philadelphia, the Inquirer is a valuable property that generates lots of cash in a market with steady, if modest, growth, Naughton said.

“Philadelphia deserves a solid, first-class enterprising and aggressive newspaper,” he said.

Zachary Stalberg, president of the Committee of Seventy, a civic watchdog group in Philadelphia, said the Inquirer and Daily News had “a lot of clout” and had helped unify what he called a “very parochial” city.

“Even with diminished resources, they’re still by far the best source of information and they still set the agenda for the region,” said Stalberg, a Philadelphia native and former editor of the Daily News.

In the newsroom at the Daily News there was resentment and bitterness toward industry analysts who had suggested that any buyer shut down the feisty tabloid to save money.

“We’re not dead, we’re not dying and we’re not going to die,” said reporter Kitty Caparella.

At the Inquirer, there was a sense that McClatchy had bought a magnificent mansion, only to sell its heirloom furnishings at a yard sale. Or worse, that the Sacramento-based company had bought a luxury automobile and now intends to dump it at a chop shop.

Rick Nichols, the paper’s food columnist and a 27-year veteran, compared the Inquirer to an orphan who had just found out his new parents didn’t want him.

Polman challenged Bennett’s upbeat assessment of the value of the paper’s journalism. At a staff meeting Monday, he told her: “This has nothing to do with journalism. It’s all about money.”

Later, according to national reporter Paul Nussbaum, an editor mentioned that reporters had at least rid themselves of reviled Chief Executive Ridder, known in the newsroom as Darth Ridder

“Yeah,” Nussbaum said he replied, “but we didn’t ask to be left in the middle of the road with nothing to drive.”

Zucchino worked at the Philadelphia Inquirer from 1980 to 2001 as a reporter and editor.