Editor's firing part of larger rift

Lewis Katz
Lewis Katz
Posted: October 14, 2013

The abrupt firing of The Inquirer's top editor last week made for sizzling headlines, but the story is ultimately not about him.

Instead, insiders say, the ouster of William K. Marimow on Monday was the result of a bubbling struggle among the owners, boldface names of the Philadelphia region's business, political, and charitable world who formed an unlikely partnership to buy the news company last year.

Leading one side is Lewis Katz, who made his fortune in parking lots and real estate across the region. On the other is South Jersey businessman and Democratic power broker George E. Norcross III.

By week's end, all the owners had split into camps headed for court, angrily disagreeing not just on whether Marimow should regain his job, but whether the publisher who fired him, Robert J. Hall, was also still employed.

The shock waves vibrated across the parent company, Interstate General Media, which employs an estimated 1,800 workers across the region and delivers news to hundreds of thousands of people a day through The Inquirer, Philadelphia Daily News, and Philly.com. How the battle ends could again reshape the company, and the local news landscape.

People who know both men say Norcross, 56, who made his fortune in the insurance industry, is skilled at, and relishes, political warfare - several used the word intimidating - while Katz and philanthropist H.F. "Gerry" Lenfest, Katz's ally in the dispute, are tough-minded but more traditional businessmen.

One Pennsylvania political operative who knows all three men - but who, like most, asked not to be named talking about them - wondered whether Katz, 70, and Lenfest, 82, have the stamina for the battle. He said their interest in the company amounted to "a swan song" after robust and successful careers.

New Jersey Sen. Richard Codey (D., Essex) said Katz should have known Norcross' determination when he entered into the partnership.

"If you challenge him, he's going to get you," said Codey, a former acting governor who said he had been targeted by Norcross in political battles.

The owners' clash cannot be understood apart from the upheaval in the media industry that has pushed the news outlets through four ownership changes in six years.

The feud spilled into public view Monday when Hall fired Marimow, a Pulitzer Prize-winning journalist in his second stint as the newspaper's editor.

Katz and Lenfest filed suit Thursday against Hall and the four other partners of IGM, charging that the firing violated the terms of the operating agreement that governs the company.

Like a political campaign, the IGM battle has featured anonymous mailings and spin wars. A memo showed up in the mailboxes and on the desks of journalists around town written by Hall, complete with disparaging remarks on the performances of Marimow and other editors.

Dan Fee, a veteran consultant in Pennsylvania politics, has been hired to handle communications for Norcross and the other owners, who together hold 58 percent of the company's Class A stock.

Katz and Lenfest asked a Philadelphia Common Pleas Court judge for a preliminary injunction reinstating Marimow immediately and removing Hall, arguing that his contract had expired and that he lacked the authority to dismiss the editor.

The IGM partnership agreement put Norcross and Katz on a two-man operating committee giving each veto power over major business decisions.

In court papers seeking an injunction, Katz said he made clear before last Monday he would not approve Marimow's termination, but Hall went ahead with it anyway.

For its part, the union that represents journalists at the two newspapers and Philly.com has not taken a position on what leaders regard as a management dispute. Marimow's firing stirred two petitions and hundreds of signatures from supporters, but he also has detractors in The Inquirer newsroom, the journalists say.

Norcross has requested a meeting with leadership of the Newspaper Guild, which represents 550 employees at the company, this week.

In his memo, Hall wrote that Marimow could "never be the change agent" The Inquirer needed to reverse a slide in circulation. He said Marimow used an alliance with Katz to thwart Hall's orders and refused to fire top newsroom managers.

Fee has said many at The Inquirer had asserted in blind quotes that Norcross has been meddling in its affairs, but that it was Katz, by helping Marimow resist change, who had the "well-documented history of attempting to interfere in the editorial and journalistic operations of the newspapers."

Norcross has pushed for a greater emphasis on local news, a redesign of The Inquirer, and a digital strategy that elevates the free website Philly.com while putting most content from the two newspapers on separate websites behind pay walls, according to people familiar with company operations.

The six partners bought the company in April 2012 for $55 million, a precipitous drop in value from the $515 million paid in 2006 by a group of local investors under the leadership of advertising executive Brian Tierney.

The company filed for bankruptcy in 2009 and was sold for $139 million to a consortium of hedge funds and investment banks that buy discounted debt.

All of this turmoil came with changes in management and cuts in wages and benefits. The latest struggle has left many employees feeling queasy, worried that the result might be another sale.

"I just feel like the child of divorcing parents, and it's a powerless feeling," said Diane Mastrull, a writer at The Inquirer for 16 years and an officer of the Newspaper Guild. "To think people's careers could be impacted by this big fight between rich men is distressing."




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