Inky Owners Square Off Over Bringing Back Brian Tierney

He's back!

By Ralph Cipriano
for Bigtrial.net

Things are going so bad at The Philadelphia Inquirer that one side in the current ownership dispute wants to bring back Brian Tierney as publisher.

The other side says, no freaking way. So now they have something new to fight about. The two ownership factions were slugging it out in court this morning over the fate of recently fired Inky editor Bill Marimow. One side wants to bring Marimow back as editor; the other side wants the two-time Pulitzer Prize winner to rest on his laurels.

Tierney, who left the Inky in 2010, has been seen around the newspaper in recent months. When asked what he was up to, Tierney reportedly said the new owners needed his help. He's been hired, at $25,000 a month, to work on a national sales campaign. So far, according to a source, the campaign has turned out to be a flop.

The current Inky publisher, Bob Hall, is a part-timer who was supposed to step down in August. Rumors began circulating that Tierney would return as Hall's replacement. Against this backdrop one faction in the Inky ownership dispute, Lewis Katz and H.F. "Gerry" Lenfest were asked two weeks ago during a meeting with the leadership of the Newspaper Guild Of Greater Philadelphia if the Tierney rumors were true. According to Bill Ross, the Guild's executive director, Lenfest responded, what would be so bad about that?

Plenty, according to Ross, who filled him in. Later that day, the Newspaper Guild also met with George Norcross, the Democratic boss of South Jersey who heads up the rival Inky ownership faction. When asked about the return of Tierney, Norcross's response, according to Ross, was, Over my dead body and the dead body of my daughter will Tierney ever come back as publisher.

Norcross's daughter, Lexie, 25, runs the philly.com website.

When Lenfest asked the Newspaper Guild what would be so bad about Tierney coming back as publisher, Ross, the Guild's executive director, asked, are you aware of our history?

Lenfest, who made his fortune in cable TV, said he was unaware. So Ross filled him in.

"Guild members see Brian Tierney as the face that bankrupted the company by overpaying for the newspapers," Ross explained.

In 2006, Tierney led a group of investors that purchased the Inky, Daily News and the philly.com website for the inflated price of $515 million. Tierney became CEO of the new ownership group, Philadelphia Media Holdings. By 2009, Philadelphia Media Holdings was bankrupt. In 2010, the two papers and the website was auctioned for $139 million to a bunch of the company's creditors. In 2012, Interstate General Media [IGM] bought the two papers and philly.com for $55 million, a fraction of what the Tierney group paid.

Ross said he told Lenfest how Tierney gave himself and two other managers Christmas bonuses that amounted to $600,000, at the same time he was asking all the unions, including the Guild, to give up $25-a-week raises. The Guild raises amounted to $600,000, Ross said.

Tierney also "pulled out of the Guild pension plan," Ross said. Tierney subsequently used the bankruptcy filing as the reason for not paying a $50 million liability due, leaving "a gaping hole" in the Guild pension plan, Ross said.

"I was somewhat surprised that the new owners would reach out to him [Tierney] in any fashion or employ him in any capacity or pay him one dollar," Ross said. "But to hear that he's dealing with advertisers and telling some of our members who still despise him that the new owners need his help, it's disheartening." 

According to a source close to the situation, Tierney was brought in to do national ad sales. His compensation of $25,000 a month was supposed to be offset by the advertising revenues generated. But it hasn't worked out that way. 

"He has underperformed," the source said.

Tierney could not be reached for comment.

After Ross informed Lenfest of the history between the Newspaper Guild and Tierney, Lenfest responded, OK, Bill, I'll be the publisher part-time.

To Ross, this made no sense.

"I said, 'Gerry, you just said that you didn't want Bob Hall to be a part-time publisher, and now you want to be the part-time publisher?' "

"It was embarrassing," Ross said.

Katz then chimed in, according to Ross, saying wouldn't it be a great story that this guy [Tierney] gets a chance to come back?

Ross said he replied, "No, it wouldn't be a great story, it would be a terrible story."

Ross isn't only one who had doubts about the wisdom of bringing Tierney back.

On April 25, 2012, Greg Osberg, at the time publisher and CEO for Philadelphia Media Network Inc., a former owner of the two Philly dailies, wrote an email to Nancy Phillips.

Phillips is the longtime girlfriend of owner Lewis Katz, who was copied on the email, as was George Norcross. In an April 23, 2012 email, Phillips had said she was sending Tierney a "non-disclosure agreement" so he could "be available to help."

"I'm all for engaging anyone who can help drive more ad revenue into our company, but I think you should look closely at the performance during his tenure of owning the company," Osberg wrote.

"He [Tierney] bought the company in July of 2006 and was relieved of his duties as CEO in June of 2010," Osberg wrote. "During that time, overall ad sales rapidly declined and we were the only major media website in the U.S. that declined in ad revenue three years in a row. Just wanted to manage expectations of what we can expect from him."

The hiring of Tierney coincided with the return of Mark Frisby, former executive vice president for production, labor and purchasing for Philadelphia Media Holdings under Tierney.

On April 22, 2012, Phillips sent Osberg a note, saying she had also retained Frisby.

"Frisbee came back, and was put back in charge of production as a senior vice president,"Ross said. "Now, he's out due to health reasons."

"But in his time here he did what he usually did," Ross said. "He cut jobs, eliminated positions, and now they're having trouble manning the operation."

Tierney had previously offered some advice to the new owners on what they should be doing. On March 31, 2012, Tierney sent an email entitled, "Congratulations -- and immediate recommendations."

"What I would do if I were you," Tierney wrote Katz and Lenfest. "Priority one is to get a good strong start. 'Locally owned' resonated with employees, advertisers and the community. You don't have to be personally front in a way that's uncomfortable for you, but a quick interim marketing campaign should be designed to channel the excitement into a new story for your sales staff to take to advertisers, and a new reason to subscribe and renew for existing and potential subscribers."

Tierney advised the new owners to "interview top 15 to 20 sales people," and work quickly to "identify five to ten great sales hires. The story of new, local, committed ownership can be leveraged to attract talent."

Tierney suggested bringing "Mark Frisby in there to look at all cost and production areas." Tierney praised Frisby as "one of the best recruits I made." He said Frisby helped to find ways to "carve $123 million" out of the business while still finding ways to grow ...  An additional bonus is that the labor leaders respect him. He's tough efficient, but fair."

Tierney also had a recommendation for who should be the new editor of the Inquirer.

"I would strongly recommend trying to get Bill Marimow back," he wrote. "First, he's considered one of the top five editors in the country -- It's a wonderful added bonus that he grew up here and knows the region so well." There was one other big bonus to bringing back Marimow as editor, Tierney wrote.

"Bringing him on board will immediately and powerfully answer the concerns of editorial independence and integrity," Tierney wrote. "It makes the issue go away, and I think getting that out of the way early is all for the good."

"Again, just some preliminary ideas," Tierney wrote. "Let me know if I can help. Brian."

Katz, Lenfest and Norcross were all in Philadelphia Common Pleas Court this morning for an hour of oral arguments. Lawyers for the warring owners sparred over whether part-time publisher Hall had the authority to fire Marimow.

After Marimow was fired, Katz and Lenfest filed suit in Philadelphia, saying that Marimow should be rehired, and Hall should be fired.

Norcross promptly countersued in Delaware courts, where IGM was incorporated, saying that Delaware was the proper venue to determine whether Marimow should stay fired or not.

During the proceedings, Katz and Norcross spent at least a half-hour behind closed doors with the judge in the case. When they emerged, neither owner would say anything publicly. Watching the day's events were Marimow and Hall, both of whom had nothing to say as well.

One of the onlookers was Ross, the Newspaper Guild's executive director. After the hearings were over, Ross talked about how Guild officers reacted to opposing presentations made behind closed doors by the rival owners.

"It was a little embarrassing that one side was much more prepared than the other," Ross said. He recalled how Norcross told Guild executive board members that the company formerly losing nearly $50,000 a day was almost breaking even, thanks to $28 million in concessions from labor unions.

Ross said Norcross made the better impression.

"He [Norcross] is putting a lot of time into this business and trying to cut out a lot of waste," Ross said. "George seemed to be more hands on and he is here more often in the building."