On an April morning, Brian Tierney wakes up in his Atlantic City hotel room, puts on his pinstripe suit and cufflinks and prepares to persuade some casino owners that the best way to get the gamblers through their doors is to advertise in his newspaper.
Ten months earlier, Tierney, an advertising and public relations entrepreneur, had become the unlikely owner of The Philadelphia Inquirer and its tabloid sister, the Daily News, when he led a group of local Philadelphians in acquiring the papers for $562m. Since then, he has been canvassing the community for support like a mayoral candidate seeking votes.
On this occasion, he and his sales team have taken over a fourth-floor conference room at the Atlantic City Convention Centre to introduce a group of local casino executives to a new weekly insert telling Inquirer readers about concerts, restaurants and other goings-on at the resort town, just an hour’s drive from Philadelphia. Gift bags stuffed with newspapers are placed on the chairs, and the room is decorated with billboards featuring Tierney’s star writers, such as Mark Bowden, whose 29-part Inquirer series became Black Hawk Down, the acclaimed account of the Battle of Mogadishu which was later turned into a film.
With full cheeks, a thick mop of hair and a vibrating restlessness, there is still a boyish quality about the 50-year-old Tierney. Guests drift in. He greets them heartily. “I love this part,” he says to no one in particular. But as the executives mingle, ignoring repeated entreaties to visit the omelette stand at the back of the room, it is hard to overlook a certain depressing symmetry: a fading newspaper is courting a casino town whose lucky days are long past.
Outside the gleaming convention centre at One Miss America Way, dilapidated terrace houses and flashing sirens attest to Atlantic City’s decay. Its casinos are a haven these days for people with motorised buggies and oxygen tanks, who still listen to the music of Frankie Avalon.
Tierney acknowledges this as he takes the stage, joking about a friend who thought he had bought the Inquirer because “there must be oil and gas under the building”. But one of his great gifts as a salesman is a relentless optimism. So, after urging his guests to call or e-mail him directly if the Inquirer does not arrive on time each morning, Tierney launches into a celebration of his papers.
One Inquirer reporter had told me that his boss had “a gazillion ideas – some of them good, some half-baked”, and as Tierney dispenses with his microphone and stalks about the stage unencumbered, those ideas come bubbling out: new promotions, new sections and features, new star columnists, a sizzling website. “The Philadelphia Inquirer and the Daily News didn’t connect with this market before. We are now!” Tierney declares. He leaves the stage to a round of applause, and it feels as if two sagging papers in a city grappling with stubborn economic and social problems might be poised to challenge Google.
After the performance, though, reality seems to reassert itself as Tierney marches though the cavernous convention centre, bags at his side, like a harried businessman rushing to make a flight. It will be months before the meeting pays dividends, he confides, if at all.
It is an odd thing to want to buy a US city newspaper these days. Circulation has been declining for decades, and now the arrival of the internet has cast doubt on the economic model that sustained newspapers for years. In May alone, US papers posted a 9.1 per cent drop in advertising revenue, according to Goldman Sachs, which is predicting further declines in 2008 and 2009. Alarmingly, those declines have occurred in a relatively healthy economic cycle.
Some might argue that Rupert Murdoch’s $5.6bn deal to buy Dow Jones, owner of the Wall Street Journal, suggests such pessimism is unwarranted. In fact, Murdoch warned two years ago that newspapers faced ruin if they did not make drastic changes. He likes the Journal precisely because it is not like other papers: it is a financial paper, with an international reach, producing specialised content that Murdoch could also use online and on his Fox television network.
But for general-interest metropolitan newspapers such as the Inquirer, which form the backbone of American journalism, the outlook seems grim. The regional department stores and banks that were longtime patrons have merged into larger groups, leaving fewer companies to take out full-page ads. Classified advertising, the lifeblood of big city US papers, has also begun to dry up.
Typically, papers have relied on such listings for jobs, real estate and cars for about a third of their ad sales and an even greater share of their profits. The problem is that such ads are better suited to the internet, where they can be easily searched and sorted. Although newspaper websites recapture some of that business, internet advertising is much cheaper than print because there is more competition. It is a common problem throughout the media, and executives complain that a dollar of traditional revenue is worth just pennies on the internet. Against that dark backdrop, Brian Tierney represents what some believe may offer the best hope of survival for many papers: the return of the local press baron.
For decades, US newspaper ownership has been a story of consolidation, with family-controlled papers across the country being gobbled up by large, publicly owned corporations. But that model has been called into question. While most newspaper chains are still wildly profitable by conventional measures – generating pre-tax margins of 20 per cent or more – they are straining to maintain those levels and deliver the earnings growth that Wall Street demands. With revenues stagnant, most have resorted to cost-cutting to appease shareholders.
Critics argue that those cuts – often laying off journalists and editors – risk damaging the product, making it harder to attract a new generation of readers. By going private, they argue, newspapers could resist Wall Street and instead invest for the long term – particularly focusing on the internet. Local, civic-minded owners are rooted in their communities and know their markets better than distant corporate bosses.
“It’s not a panacea, but at least it gives a paper a chance,” said John Carroll, the former editor of the Los Angeles Times, who has emerged as one of the most forceful advocates for local, private ownership. At a conference last year, Carroll sketched out the difference between a 10 per cent profit margin – acceptable to most private owners – and the 20 per cent demanded by shareholders of the Tribune Company, which owns the LA Times. At 10 per cent, Carroll said, the paper could afford to invest in internet technology while still serving the community. At 20 per cent, the paper would have to cut 80 editorial jobs each year until, one day, the newsroom would be empty.
A new generation of would-be Citizen Kanes may soon test that arithmetic. In March, Sam Zell, the Chicago real estate billionaire, took Tribune private in an $8.2bn buyout. The company owns the Chicago Tribune and the LA Times, along with half a dozen other major titles and 23 television stations. There is speculation that Zell may sell the LA Times to David Geffen, the Hollywood mogul, who had previously offered $2bn in cash for the paper.
In Boston, Jack Welch, the former General Electric chief executive, has joined a group of town elders to try to prise The Boston Globe away from The New York Times Company. Meanwhile, deep-pocketed locals have expressed interest in acquiring such respected papers as Long Island’s Newsday, The Baltimore Sun, The Hartford Courant, and others. Warren Buffett, the legendary investor, recently joked that a newspaper is a trophy for the billionaire who lost out on the local football team.
As a self-made businessman with deep community ties and a gift for mounting a big public campaign, Tierney seems to fit the bill. “He has an ability to get people excited about what he’s doing,” said Chris Le Vine, a longtime friend, who still recalls Tierney’s run for the student senate three decades ago at Episcopal Academy, where the future publisher also played football and threw the shot-put. “Everyone said, ‘I’ll do this, or I’ll do that.’ Brian came in with a six-point plan and was very organised about it.”
So far, however, it is not clear that a new ownership model can rescue city newspapers. And to some, Tierney’s proximity to Philadelphia’s business and political elites is a worry. In the Inquirer newsroom, the new publisher is still remembered for his aggressive style when he worked as a publicist for clients such as the local Catholic archdiocese. There is a fear that the paper, once famous for its aggressive investigative reporting, may now have to pull its punches.
It would not be the first time an owner has changed the paper’s fortunes for the worse. Walter Annenberg, who inherited the Inquirer from his father in 1942, was infamous for using the paper to settle personal scores. Soon the Inquirer was not even considered the best paper in its hometown – a distinction that went to the Philadelphia Bulletin. Salvation arrived in the form of Jack Knight, who bought the Inquirer in 1969. Knight had come of age as a publisher with a single paper in Akron, Ohio, during the Depression. He triumphed over his competitors by sacrificing short-term profits and reinvesting in his newsroom when others were cutting back.
One of his shrewdest moves was to install Eugene Roberts as editor, and give him free rein. Roberts transformed the Inquirer from a paper that struggled to recruit reporters into one of the finest in the country. Under Roberts, the Inquirer won 17 Pulitzer Prizes between 1972 and 1990 – more than any other paper – and opened bureaus around the world.
“Those were the Camelot years,” said Gail Shister, the Inquirer’s long-time television reporter. “Every year we had a fabulous Pulitzer party.” If reporters such as Bowden had a compelling idea – say, chasing endangered rhinos for a month in Africa – Roberts would come up with the money. The Inquirer’s exhaustive coverage in 1979 of the near meltdown at the Three Mile Island nuclear plant near Philadelphia is still regarded as one of the great moments in newspaper journalism.
But Camelot did not last. Knight went public in 1969, and five years later merged with Ridder Publications, another family-controlled newspaper chain. Those changes did not affect the Inquirer at first, but they became more pronounced after Jack Knight and his deputies began to retire and Wall Street’s demands for profits began to outweigh the pursuit of journalistic excellence. The accountants at corporate headquarters held sway. Roberts retired in frustration in 1990. “Jack Knight and the corporate people who rose during his tenure knew that they had prevailed in major American cities – in competitive cities – because they put out the best newspaper,” Roberts tells me when I go to visit him at his apartment on the Upper East Side of New York. “There just wasn’t any doubt in their minds that good journalism was good business.”
Brian Tierney could see the deterioration even before he bought the Inquirer. When he paid a visit during the auction, there was a film of dust darkening the stained glass globe that hangs in the lobby. The paint was peeling.
With no formal publishing experience, Tierney was considered a long-shot when the Inquirer came on the market in late 2005. McClatchy, another newspaper chain, won a lacklustre auction. But then it promptly put the Inquirer and 11 other Knight Ridder titles back on the market, apparently not eager to own papers saddled with high labour costs in ageing, slow-growing markets such as Philadelphia.
Tierney was undeterred. He arranged a crash-course in publishing by asking advice from Dean Singleton, the chief executive of MediaNews, a privately held newspaper group, with 40 papers in mostly small and medium-sized markets. He also began recruiting local investors, and eventually signed up 10, including the local carpenters union. “A lot of life is just picking up the phone,” Tierney told me.
To overcome concerns about conflicts of interest, each investor signed a pledge not to meddle with the paper’s journalism – and also not to sell their stakes for five years. In late May, their bid of $515m, plus the assumption of $47m in pension liabilities, prevailed. “I promised them it would not be a Google-like return, but that it would make sense,” Tierney said. He set a profit-margin target of 12 per cent.
At a triumphant celebration at the Inquirer’s headquarters, featuring the Philadelphia Eagles cheerleaders, Tierney declared: “The next great era of Philadelphia journalism begins today.” Even the more cynical reporters hoped for the best.
But just as the new owners were moving in, the business was collapsing around them. Advertising revenues fell in July and August and then sank more than 10 per cent in September compared with a year ago. The next month – in the thick of labour negotiations – Tierney sent a memo to staff warning that the paper risked falling short of performance targets that were attached to a $350m bank loan. He now floated the possibility of layoffs. “I’ve seen better morale in a prison,” Shister said of the reaction in the newsroom.
Bill Marimow, a highly respected veteran who had become editor of the Inquirer, agreed. “The situation was glum – worse than glum,” said Marimow, who had won two Pulitzers at the paper under Roberts before going to edit the Baltimore Sun and serve as ombudsman at National Public Radio.
After threatening to strike, the union eventually backed down and agreed to accept cuts to their pension plan and health benefits. Still, in a vote just before Christmas last year, members passed a no-confidence resolution, stating that they had no faith in the owners and “no stomach to hear more of their cheerful prattle”. Just days into the new year, the axe fell: 71 journalists were laid off – about 15 per cent of the newsroom staff.
“We always knew the negotiations would be the whitewater part of the trip,” Tierney says, brushing off the episode when I go to see him in his office a few weeks later. He argues he had never specifically promised that there would be no layoffs. The paper lost $50m in revenue between 2004 and 2006. And the cost savings, more than $20m, were not going to distant shareholders, but back into the paper itself.
The Inquirer building, which opened its doors in 1925, is the sort of towering Art Deco monument fit for a press baron from an earlier era. Tierney had moved into Walter Annenberg’s old office on the 12th floor, where the balcony looks on to the city skyline.
On a wall beside his desk he had pinned up front pages from a dozen newspapers, including The New York Times, Houston Chronicle and Le Monde, judging them against his own paper each day.
Tierney points with evident pride to a super-sized “Philly.com” logo just beneath the Inquirer banner on the front page – an innovation that he claims has helped to double the website’s daily visitors to 1.3 million.
He is adamant that he shares Knight’s vision and that quality journalism is good business. But he also believes his reporters will have to focus on a smaller patch in an era when budgets are strained and readers are now able to get their news from the internet and cable television. “The mission that we’ve defined is to be the indispensable source of news for the city of Philadelphia, the suburbs and south Jersey,” Marimow says. Like other city papers, that means retreating from costly foreign stories covered by heavyweights such as The New York Times and The Washington Post – stories that defined the Inquirer under Roberts – and instead assign reporters to in-depth features about City Hall.
Roberts sees some improvement in the Inquirer of late. But the great editor is withholding judgment. “The question is: will [Tierney] support the newsroom financially to the degree it’s going to take to make it a healthy paper?” Roberts asks.
Many Inquirer reporters seem similarly ambivalent about their new boss. They acknowledge the depth of the industry’s problems, and respect his promotional savvy. They also credit Tierney with keeping his promise so far and not meddling with their reporting. But there is lingering bitterness about the layoffs and – more broadly – an inherent distrust of a former publicist. (This may be a warning to other aspiring press barons: while you can buy a newspaper, there are no guarantees that the affection of the newsroom will come with it.)
“If you’re a journalist, you’re trained to have your guard up, to have your B.S.-meter finely tuned,” Tierney acknowledged. “And, frankly, our folks have been through a lot.”
Rather than haunting the newsroom, he has focused on the business side of the operation, which he believes languished under a corporate owner and lost whatever entrepreneurial spark it might have once had. (It is a problem that Tierney believes runs through much of an industry once protected by regional monopolies.) To reverse that, Tierney has recruited new marketing and finance executives from the Pennsylvania lottery and JPMorgan Chase.
He talks about a slew of innovations he has rolled out over the past year. For example, after noticing during a visit to a local convenience store that many people only bought the Inquirer for its sports coverage and discarded the rest, Tierney convinced Commerce Bank to sponsor a recap of the news on the back of that section each day. The idea is that a snippet from an arts feature or report on the school board might catch a sports fan’s eye and prompt him to turn the page or visit the website. The Inquirer has also established a new “media lab” to create more innovative print advertisements for its customers.
Tierney is hoping such projects will help to stabilise the print business until the internet catches up. Philly.com is expected to generate $25m in revenue this year; Tierney is hoping to double that over four years.
In fact, the strategy is not so different from other newspaper companies, but what may be is the speed of its implementation because Tierney does not have to deal with layers of bureaucracy and far-flung operations. “We’re all doing things similar to what Brian’s doing, but he’s probably doing it faster because he doesn’t have this nagging pull from the past,” Singleton says, calling Tierney “a refreshing breath of fresh air to our industry”.
Not all of his ideas, though, have been well received. One initiative – asking Citizens Bank to sponsor a column about local businesses – struck some observers as a breach of the wall separating editorial from commercial. “It’s an out-and-out conflict of interest,” said John Morton, a longtime consultant and respected newspaper analyst. “But that’s what you get when you have a non-newspaper guy running a newspaper.”
For all the innovation and the energetic sales campaign, the payoff so far has been meagre. Advertising revenue at the Inquirer fell 6 per cent in the first three months of the year. That performance was actually better than some publicly owned newspaper companies, which suffered double-digit declines. Because the Inquirer is private, executives no longer have to worry about impatient investors. But there are now bank loans, and Tierney will have to scramble to meet his financial targets.
He would prefer to look on the bright side and, on April 30, nearly a year after he and his partners submitted the winning bid for the Inquirer, something like good news finally appeared. When circulation figures were released, the Inquirer was one of the only papers in the country to report a gain. The improvement was modest – just 0.6 per cent, or 2,136 copies on the average weekday. Much of it could be accounted for by the decision to resume the basic marketing that Knight Ridder had neglected.
Still, Tierney, ever the salesman, made sure the world was aware of the news. The next day, he produced a mock newspaper called the Impossible News. “PIGS FLY”, screamed its massive, above-the-fold headline. The local owners, it said, had proved the critics wrong and delivered the first circulation gain in three years. Some in the newsroom rolled their eyes.
But Tierney either did not notice or did not care. “This is the most important job in Philadelphia,” he tells me, delivering the line like a true press baron.
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Black Hawk Down: An American War Story The Original Newspaper Series Online Experience the dramatic raid of Mogadishu with philly.com's Black Hawk Down site, featuring full text of the Philadelphia Inquirer series plus exclusive photos, video, audio, and more. Produced by the Philadelphia Inquirer and philly.com. Begin with the first chapter. |
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Somalia: Good Intentions, Deadly Results This gripping, Emmy-award winning companion documentary to Black Hawk Down vividly tells the story of one of America's biggest modern military blunders and the events that led up to it. Produced by KR Video. This video is the uncut, 57-minute version of the show that aired on CNN as Black Hawk Down: A Story of Modern War.
Watch a preview of the video. (RealVideo format)
The video is available for $19.95 plus shipping and tax (where applicable). To order by phone, call 215 854-4444 (6am-5pm ET) or shop online. |
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Black Hawk Down: A Story of Modern War by Mark Bowden Now available in paperback from Penguin Books, this gripping true story by Philadelphia Inquirer reporter Mark Bowden is based on the acclaimed newspaper series that first ran in 1997. |
