Newspaper Guild backs out of auction

Posted: April 25, 2014

A ND THEN there were two - again.

The Newspaper Guild of Greater Philadelphia, the largest employee union at the Daily News, the Inquirer and Philly.com, announced yesterday that it was no longer interested in bidding in the upcoming auction for the city's largest news operation.

Why? The price is too damn high.

That leaves the two factions led by businessmen George Norcross and Lewis Katz - the feuding co-managing partners of parent company Interstate General Media - as the only parties currently seeking to purchase the newspapers and website.

Norcross and Katz said in Delaware Chancery Court last week that they were prepared to bid at least $77 million. That's far too rich for the Guild's blood.

"The $77 million figure is just not something anyone is willing to go near," Guild attorney Lisa Lori said outside the courtroom yesterday.

The newspapers and Philly.com were purchased for about $55 million two years ago, but Katz and Norcross are now seeking to force each other out. Norcross wants an English-style live auction limited to the current owners. Katz wants an open auction, but with sealed bids.

Judge Donald Parsons Jr. did not make a decision yesterday, but seemed to be losing patience with both factions. The ownership dispute has caused instability within the company, according to court testimony last week.

"Both sides say time is of the essence," Parsons said. "Anytime I try to get anything concrete out of either side, I don't get it."

Parsons did not provide a timetable for his ruling, but questioned whether anyone else is seriously interested in buying IGM. Last night, Guild president Howard Gensler and executive director Bill Ross said in an email statement that $77 million, which is about eight times this year's expected cash flow, is not a "fair-value bid."

"So at $77 million, we're out," they wrote. "At a more reasonable price - one that might allow the company to grow and thrive - we would hope to be back in."


On Twitter: @wbender99

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