Bankruptcy, Tierney And ‘Business As Usual’

Bankruptcy in the real world isn’t like Monopoly. In the real world, filing Chapter 11 is a way to protect a company from its creditors while reorganizing. In Monopoly, on the other hand, nobody ever reaches bankruptcy because people quit playing when they realize it’s three hours in and nobody has even built any houses yet. Sometimes it’s nice to imagine a world like Monopoly.

Ahem. By now you know the story: The owners of the Inquirer and Daily News have filed for bankruptcy. Since then, there’s been a ton of hilarious news: We learned Tierney gave himself a 42 percent raise in December, then he and two other executives who got raises — including professional sports car driver Mark Frisby — gave them back.

But there’s more! Yesterday the newspapers’ owners had their day in court. Ownership rarely, if ever, remains the same when a company files for bankruptcy, but the papers’ owners want to remain in charge, their lawyers said yesterday. Here’s the juicy details:

But lawyers for the investors who hold $297 million in debt said they were stunned that Brian P. Tierney, chief executive of the papers, had turned away from a $20 million lifeline from current lenders in favor of a loan that would protect his job, according to a court filing and testimony at yesterday’s opening hearing in Philadelphia.

Instead, Tierney and his backers lined up a $25 million loan - known as debtor-in-possession financing - from a different group that included Philadelphia Newspapers chairman Bruce Toll. It includes a provision that would put the loan in default if Tierney left the company.

There’s reason to believe this isn’t just ownership trying to save face. Obviously, Tierney doesn’t want to lose his job. But it is true that any new owners would possibly (probably? likely?) shutter the Daily News and maybe void union contracts; creditors have been pushing the papers’ owners to do this for months now. “They wanted me to stay and offered me a handsome compensation plan and a piece of the company, both verbally and in writing,” Tierney said in a statement.

Andrew Kassner, an agent for Citizens Bank, says the creditors are not looking to simply dismantle the papers and run things with a skeleton crew. He also notes, though, the company is worth less than its debt and criticized the papers for poor management.

“Most companies would have hired a crisis manager,” Kassner said. “To this company, it was business as usual.” To be fair, newspapers have been in crisis since about 1998 or so.

Kassner made it pretty clear that the creditors want Tierney out; he also attempted to sound like there wouldn’t be massive cuts if there were a bankruptcy restructuring. Tierney said afterward that “[o]nce we told them that we weren’t interested in working for them to, in effect, damage the company we love, they had a change of heart.”

So, yes, it was just a big spin session for everyone during yesterday’s hearing. The next one’s on March 9.

A Nonanswer On Tierney’s Future

A lot to write about the bankruptcy filing of Philadelphia Media Holdings, but I’m trying to think first for once. (About the content. The jokes are already done.)

I needed to write about this, though. Daily News editor Michael Days sent out a Q&A the company sent out to its employees. And check this out:

Will Brian continue to be CEO? Will the management team stay in place?

Brian as well as the rest of the management team remain actively engaged and committed to this company.

You have to give management over at 400 N. Broad credit. Not too many companies have the ability to dodge a question in their own Q&A! Impressive.

Tierney: Chasing Cars, Wielding Bats

There’s a big ol’ Steve Volk article in February’s Philadelphia magazine about Brian Tierney and the Inquirer, and how newspapers are dying if not dead, and Philebrity and Phawker, and Will Bunch and norgs. Norgs! I know. I feel like I’ve wandered into a time portal to late 2005, too. Man, can you believe that two Central Missouri State professors just found the 43rd Mersenne prime?! That Bush sure messed up during Hurricane Katrina! Pretty sweet that there were parliamentary elections in Iraq, recently, though.

But there is one pretty amazing story. Take it, Newspaper Guild representative Bill Ross:

And Ross says a couple of people emerged from a private meeting with the CEO claiming that he’d spoken to them, in his 12th-floor office, with a baseball bat in his hands. Ross also adds that in January, Tierney took to patrolling the parking garage, watching to see what time employees were arriving to work and asking managers about those who were late. “That’s what I’m getting calls about now,” says Ross. “He’s walking around the parking garage. If he gets hit by a car, it’ll be his own fault.”

First off: Tierney needs to watch out for this car. I mean, that’s probably the fastest one in the whole lot. Second off: The Phillies should totally sign Tierney as a bat off the bench.

1978 Called. It Wants Its Newspaper Back [Phillymag]

Abridged Daily News Columnists: Brian Tierney Special Edition

There’s only one column in today’s Daily News, but it’s by Publisher Brian Tierney, so let’s make fun of it for a little bit. (Post-writing editor’s note: Or maybe for a long time, like a billion words or so. Whoops.)

WHAT HAPPENED last week was like a scene from a holiday movie.

Did an angel show Brian Tierney what it would be like if he had never lived in a gimmicky, schmaltzy way?

In the face of the biggest demand for toys in years, the Philadelphia Area Marine Corps Reserve’s Toys for Tots program was experiencing its smallest contributions in memory. With a week to go in its campaign to help needy children, the toy total was less than half its usual count. And, in the most challenging economy in decades, there was little hope for improvement. Things looked bleak.

Oh. That’s not good, but I don’t really see how it’s much like Brian Tierney being visited by three ghosts and learning the true meaning of Christmas.

We started a campaign in the

I just want to point out that, currently, this is the last part of the story in regular text; everything else is in italics from this point out. I totally haven’t italicized my whole site in a while, but it happens to the best of us.

Daily News, Inquirer and Philly.com to alert our readers to this need.

A week later, 40,000 more toys came through our doors, to put the total at over 60,000. The increased cash contributions are still being tabulated.

This “Miracle on Broad Street” illustrates the extraordinary power of our newspapers - to highlight a problem, galvanize our community and make a real difference, every single day.

Let’s call a moratorium on “Miracle on [x] Street” references unless it really works from now on. This is about the third or fourth thing I’ve heard called “Miracle on Broad Street” this year (including the Phillies’ World Series win, which took place in between 10th and Darien Streets).

And, uhm, this scenario doesn’t sound much like Miracle on 34th Street. The only way this would be like a Christmas movie is if people donated Red Ryder carbine-action 200-shot range model air rifles. (Note: Please do not notify me of a movie called The Christmas Toy Drive or something that is about a newspaper and its heroic toy drive.)

More »

Brian Tierney Now Being More Direct

Let’s see, there’s Joe Biden and… hey, Brian Tierney, aka Joe the Publisher. Good to see Tierney still in good spirits, fighting for his candidate ’til the polls close.

Stupid Attention-Whoring Filmmakers Get Attention

Brian Tierney’s ongoing quest to make the Inquirer and Daily News more corporate than when Knight-Ridder owned them is right on schedule. The newest evidence is a DVD included in certain copies of the Inquirer on Sunday called Obsession - Radical Islam’s War Against the West.

It was actually in a host of other papers, including the Bucks County Courier Times. It’s common knowledge: Newspapers print any ad if you pay them enough money. But this ad has the added intrigue of offending someone, so it makes the news.

Spokesman Gregory Ross says the group’s intent is strictly to educate Americans about terrorism: “We are not against Muslims. We are only against that 10 to 15 percent that are radical.”

In 2003, The American Conservative wrote that 99 percent of Muslims were moderate. But the magazine warned: “One percent of one billion is a lot.” Now after five years of war in Iraq, we have 10 to 15? Surely this film’s spokesman (spokesman??) is a fair and impartial judge.

If there are radical Muslims, surely there are tubular Muslims, too, right? I bet those guys are awesome.

Pigs Flying Much Closer To Ground

Last last week, Phillymag’s Steve Volk wrote about the financial worries at Philadelphia Media Holdings, the Brian Tierney-captained crew running the Inquirer, Daily News and other related properties.

The 411: Standard & Poor’s reported PMH will have its debt interest rate go up a point in exchange for being allowed to miss a few payments. Its loan was trading in the mid-70s in June and is now in the 40s.

Want more bad news? Sure: Boscov’s, which has filed for bankruptcy, owes the paper nearly a million dollars.

Of course, when the company gets that money, it will immediately be spent on inflatable pigs and cat food, so that Philly.com may construct a whole army of 40-plus pound cats to put on the front page.

Financial Worries Deepen at Philadelphia Media Holdings [Phillymag]
Boscov’s files for bankruptcy; several stores closing immediately [Baltimore Sun via Phawker]

Nutter And Tierney, Sittin’ In A Tree

Word is Michael Nutter just did a photoshoot with Brian Tierney in his office. And he had two undercover security people casing the Daily News newsroom. Maybe he’s going to plant a bug in the office! Oh, that would be awesome.

Hey The Inquirer Is Doing That Pig Thing Again

Inquirer circulation numbers were up slightly; the flying pigs “concept” was “re-launched.” Uh-huh. Look, The Return of the Flying Pigs dot com.

The theme this time is “The Return of the Flying Pigs: The Movie,” and there’s a whole ‘nother four-page supplement. So far, the flying pigs movie trailer has crashed my browser twice.

‘NYT’ Continues To Debase Philadelphia

Okay, not really. But check out this correction in today’s New York Times:

An article in Business Day yesterday reported on a growing trend among large newspapers to accept some circulation declines because of the high expense of attracting and keeping new subscribers. The article was illustrated with a photograph of a delivery truck for The Philadelphia Inquirer and The Philadelphia Daily News and a caption that said “Big American newspapers sell about 10 percent fewer copies today than they did in 2000.” The Inquirer’s circulation, like those of other newspapers, has declined from its 2000 levels, but since new owners took over last year, its daily circulation increased almost 7 percent from September 2006 to March 2007, compared with the previous six-month period. The Philadelphia Daily News’ circulation also increased by slightly more than 1 percent in the same period.

Raise your hand if you think Brian Tierney complained to the Times himself. Okay, you can all put them down. But really: Way to run a photo of a newspaper whose circulation was actually up recently, Times! Didn’t you see the “Pigs Fly” supplement?

Corrections 10.02 [NYT]
Archives: Pigs
Thanks, Matt