2012-02-16 / Local & State

Developer May Open Rival Philadelphia Newspaper

By Maryclaire Dale
ASSOCIATED PRESS

PHILADELPHIA (AP) – A wealthy developer vowed Friday to open a rival newspaper unless he can bid against a former governor for control of The Philadelphia Inquirer and Philadelphia Daily News.

Bart Blatstein, who already owns the building housing both newspapers, and philanthropist Raymond Perelman say they’ve been excluded from any potential sale of Philadelphia Media Network. The company operates both print dailies and the Philly.com Web site.

Blatstein said he has heard from dozens of current and former newsroom employees, many upset about the alleged censorship this week of stories on Blatstein’s interest. A journalists’ union has filed grievances on behalf of two reporters involved.

“They believe, as do we, that the damage that PMN has inflicted on itself may be permanent,” Blatstein said Friday in a statement. “It may well be that Philadelphia has been a one-newspaper-company town for too long.

Philadelphia Media Network officials had no comment on Blatstein's announcement, spokesman Mark Block said.

Creditors bought the newspapers for $139 million at a 2010 bankruptcy auction. They later sold the iconic headquarters building to Blatstein for about $23 million, with plans to move staff to a former retail space this summer. The hedge-fund owners have not announced any intent to sell the company, which knowledgeable observers say could now be worth less than $40 million.

However, former Democratic Gov. Ed Rendell said last week that he leads a local group – including Philadelphia Flyers owners Ed Snider and New Jersey Democratic figure George Norcross – that filed papers with an investment bank conducting a potential sale. Rendell called the effort a “civic-minded” venture and said his investors are not focused on short-term returns.

Blatstein and Perelman soon expressed interest in mounting separate bids. Perelman and his son, Revlon Inc. Chairman Ronald Perelman, had bid nearly $100 million in cash for the newspapers at the 2010 auction before dropping out. Blatstein has several financial partners.

Perelman, 94, wrote to the board of Philadelphia Media Network this week to demand an open and fair bidding process. He said he's been “surprised and dismayed” by the week’s developments. Blatstein said he's heard nothing in response to his stated interest.

“We remain perplexed as to why the out-of-town hedge funds ... seem uninterested in hearing our ideas, or those of Raymond Perelman, concerning ways to grow the value of the print and digital content ... as well as our ideas on valuation of the (company’s) assets,” Blatstein said.

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