Perelman may back union bid for papers
WILMINGTON, Del. — Philadelphia newspaper employees hope to mount a bid in the latest sale of their company with help from local philanthropist Raymond Perelman, the papers’ union chief told a judge Wednesday.
Perelman, now in his mid-90s, has been interested in The Philadelphia Inquirer and Philadelphia Daily News for years, and bid on them in 2010.
The upcoming auction of the company, which also operates the Philly.com website, comes amid a feud between rival owners George Norcross and Lewis Katz. They led a small group of investors who bought the newspapers in 2012 from hedge funds who wanted to sell or dissolve them.
But their two-man management committee has proven unworkable, as the business tycoons feud over key newsroom jobs and business strategy. In court testimony this week in Delaware, where a judge must craft the auction rules, Norcross pledged an opening bid of $77 million to make current investment partners whole. Katz soon vowed to match it.
Bill Ross, the executive director of the local Newspaper Guild, confirmed Perelman’s interest during his testimony. Perelman and his advisers would need time to review the books, but Ross did not think that would delay the sale much.
The goal is to sell the company quickly, perhaps within two months.
“I’m pretty confident that they would know pretty quickly, once they see the finances,” Ross said.
The guild represents more than 550 newsroom and other employees, who could conceivably offer concessions as part of the bid. Their labor contract expires in February.
Chancery Court Judge Donald Parsons Jr. must decide whether the union and other outside parties can bid, and what style auction to hold to get the highest price. Norcross wants an “English-style” auction with audible, increasing bids, but one only open to current owners or the guild.
Katz favors a sealed-bid auction, open to anyone. Several business experts debated the potential outcomes this week as they testified about matters including “the testosterone effect” of live auctions.
Parsons will hear arguments on the auction issues when the hearing resumes on April 24.
The newspapers have been sold five times since 2006, when they were sold for $515 million.