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Republican activist, backers looking at bid for Philadelphia papers

PHILADELPHIA—He's proud of his "passionate" work to promote the Republican Party and the Catholic Church. He's also been a paid advocate for Sunoco, Exelon and other powerful institutions that often make the news.

But Philadelphia advertising and public relations specialist Brian Pace Tierney says he and his financial backers—such as auto dealer and investor Bruce E. Toll, developer J. Brian O'Neill, money manager Leslie E. Brun—are not planning to make The Philadelphia Inquirer and Philadelphia Daily News partisans for any entrenched interest if their bid to buy the newspapers is successful.

Tierney said he wanted to give The Inquirer more personality—and make it more "fun" to read.

"They're great products," Tierney said, but "they aren't marketed as they should be." Too many Inquirer promotions and suburban pushes have been "halfhearted, starting and stopping," he added. "We want to win."

Tierney and Toll said local businesspeople had pledged $240 million to support a bid, and Tierney has said that four banks have agreed to lend more, if financial data justify a binding offer.

"Brian has done a very good job of getting people interested in the property," said Seth Lehr, a principal at LLR L.L.C., part of the $6 billion asset-management group headed by Philadelphia investor Ira Lubert. The next step is to examine the books, Lehr added.

The Philadelphia newspapers are among 12 Knight Ridder Inc. newspapers offered for sale by the McClatchy Co., which does not want the papers when it buys the rest of Knight Ridder this summer. McClatchy is expected to name the buyers as deals are struck over the next few weeks.

Other bidders include a Philadelphia-focused group associated with investor Christopher M. Harte of Texas and Maine, and at least two national bidders: Yucaipa Cos., a union-backed California investor that wants all 12 papers; and MediaNews Group Inc., a Denver chain that has expressed interest in the larger markets.

Local ownership offers freedom from relentless Wall Street profit pressures, but also the risk that local owners will slant the news to favor personal interests.

"Journalists are not in business to be popular," said former Inquirer editor James Naughton. "What would concern me about either Mr. Toll or Mr. Tierney is that they have such a clear vested interest in having the news organization write favorably about them that even the best of intentions might be difficult to live up to."

In an interview last week, Tierney said the Philadelphia investors "are sophisticated and smart enough to know that the quickest way to kill this is to interfere with the editorial independence of the papers."

He said the group's media view would not be dictated by his past service as a Reagan administration loan bureaucrat, campaign chief for Philadelphia Republican mayoral candidate Sam Katz (whom The Inquirer endorsed), head of the Republican National Committee's outreach to Catholics, and an aggressive advocate for clients who wanted to influence Inquirer and Daily News coverage.

"I wouldn't want to read a house organ" for any party, Tierney said. "I don't sit there and watch the Fox Channel. ... I'm an independent person with independent views."

The group includes, among others:

Bruce E. Toll. A cofounder of the Toll Bros. home-building group now run by his brother Robert, Bruce Toll has diversified his holdings into office development, the giant Reedman Toll auto dealership, and medical, telecommunications and software companies. "I've never done business with Brian, but he has a very good reputation. He and I are leading this group," Toll said last week.

J. Brian O'Neill. A developer who has specialized in rehabilitating industrial sites, O'Neill "is a great marketer," Tierney said. "He knows how to grow."

Leslie E. Brun. Chairman emeritus of Hamilton Lane Advisors, a Bala Cynwyd, Pa., firm that picks private-equity investments for the California, New York and Texas state pension funds. "It would be exciting to do something that is both supportive of very fine institutions in Philadelphia" and promises a financial return over time, Brun said.

Tierney is a Drexel Hill, Pa., native and lawyer who sold one of his ad and public relations agencies to True North (now Interpublic Group) in 2000 and another to Advanta Corp. in 2004. "He has been a demonstrably successful business executive for years," Brun said. "Is he a newspaper guy? No. Can he can bring together the talent that exists currently in this community and would be needed to amplify that? I think so."

How would the group address flat advertising, lower print sales, and low profit from online ventures? Tierney said he would consider new publications, like ad-rich business and sports weeklies, plus more Center City coverage that could draw real estate ads.

"People say kids don't read. Well, they do read. I'd love them to read The New York Times, but they read People, they read Sports Illustrated for Kids, they read rap magazines," and they'd read papers that met those needs, Tierney said.

Tierney also wants national and world news—"they need to know what (President Hugo) Chavez is doing in Venezuela and how it will affect oil prices"—but he says he has not figured out whether staff should write those stories, or whether to buy them from other sources.

"Can we be The New York Times? No. But they can't be The Philadelphia Inquirer. We can be as great as them, in our own way," Tierney added. He said he relished competing with publishers like Journal Register Co., which runs a group of dailies in the western Philadelphia suburbs that have been losing circulation.

Estimates for the value of the 12 Knight Ridder papers have ranged from $1 billion to $2 billion, based on sales, profits and projections. Yucaipa made a conditional offer that could top $2 billion, the Los Angeles Times reported last week without naming its sources. The Philadelphia newspapers include more than a third of the group's sales, and roughly a quarter of the profit.

Yucaipa, MediaNews, Harte and Tierney have all declined to discuss details of their bids.

Tierney has met with The Inquirer's Teamsters and Newspaper Guild leaders, and has called for special advice from Sam McKeel, The Inquirer's general manager in the 1970s who became publisher in 1986.

"I have talked with him a couple of times, just trying to supply some background and a sounding board," said McKeel, now retired. "I think there's a lot of virtue in local businessmen who are honest in their desire to have this a locally owned newspaper company."

"I consider (Tierney) one of the smartest guys in the Philadelphia region," said NutriSystem chief executive officer Michael J. Hagan, who said he had been approached by, but would not confirm if he had decided to join, the Tierney-Toll group. "How would we stop the slide in circulation? How do we grow the revenue? You don't want a hatchet man. ... You want folks who have their tentacles in the region. Like these guys."


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