35 more jobs in jeopardy at papers, website

Posted: March 27, 2012

If misery does indeed love company, it would probably be right at home at Philadelphia Media Network Inc.

Managers of the company, which owns the Daily News, Inquirer, philly.com and SportsWeek, have proposed cutting 35 jobs within the next six months - on top of layoffs and buyouts that eliminated 45 jobs earlier this month.

The potential new round of cuts was detailed in a document, obtained yesterday by the Daily News, that outlined the terms of a potential sale of PMN by its current hedge-fund owners to an investor group now led by local businessmen Lewis Katz and George Norcross.

The letter of intent, dated March 20, from Katz and Norcross to Evercore Partners, which is managing the sale of the media company, puts the possible purchase price at $60 million.

According to the letter, the job cuts earlier this month cost PMN about $900,000 in severance.

The letter notes that the company's senior managers explained in a presentation to the potential new owners last week that PMN would cut 35 additional jobs, which would cost about $200,000 in severance pay.

An additional $500,000 would go toward severance of senior-management officials, the letter says. It also notes that the Norcross and Katz group wants to retain "certain key senior officers" but does not name them.

PMN spokesman Mark Block declined to comment.

It's unclear from the letter who the other members of the Katz and Norcross group are, following a handful of roster changes.

Philanthropist H.F. "Gerry" Lenfest, who reportedly joined the group after former Gov. Ed Rendell bowed out, declined to comment yesterday, other than to confirm that he was still interested in purchasing the papers.

Fellow philanthropic heavyweight Raymond Perelman said that he briefly joined the Norcross and Katz group, following an ill-fated attempt to buy PMN himself.

"I was involved, but then I pulled out," Perelman said, adding that Comcast-Spectacor chairman Ed Snider, who had been an early member of the Norcross and Katz group, also was no longer on board.

"It was their deal to control," Perelman said. "I would have been a minority owner, but I wanted to be a majority owner."

Perelman said he had been willing to put up most of the money for the sale.

"We were negotiating. I was willing to do it, but in the end, it didn't work out," he said.

"They were very gracious," Perelman added. "Let them buy it, and God bless."

Contact David Gambacorta at 215-854-5994 or gambacd@phillynews.com, or follow on Twitter @dgambacorta.

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