The Fight for the Future of Philadelphia’s Newspapers

Of all the people in this story, Phillips, 50, might be the most complicated. For years she has swept into the newsroom each Monday, a big bunch of fresh-cut flowers clutched before her. She speaks in stately, almost Victorian cadences, coming off like Mary Poppins. As her colleagues faced a never-ending stream of furloughs, buyouts, layoffs and pay cuts, her Twitter stream read like an ongoing accounting of relative wealth and privilege. (“Am I the only one who finds creme fraiche evocative of caviar? Even in the absence of that glorious pairing, it reminds me + transports me.”)

But for all her blue-blooded posturing, Phillips has logged 30 years of blue-collar effort, slogging across the grittiest terrain, tugging at the most tangled secrets, to get the story. She obtained a hit man’s confession in the infamous murder of rabbi Fred Neulander’s wife. She wrote the first story accusing venerable Daily News sports columnist Bill Conlin of child molestation. And today, in her role as city editor, she is equally well-regarded as both skillful and a good boss.

But she happened to have that rich, politically connected boyfriend. For years, the relationship between Katz and Phillips, who met in the early ’80s, was the Inquirer newsroom’s open secret. Katz never divorced his wife, Margie, for years appearing beside her at family functions. (Margie Katz passed away in late December.) But many years ago, he and Phillips moved into a condominium overlooking Rittenhouse Square.

Katz wouldn’t be interviewed for this story. (Through his spokesman, Jay Devine, he denies the specific accounting of his dinner at Lamberti’s with Norcross but doesn’t provide any details.) However, a few dozen interviews and a torrent of emails leaked to media all over town tell the story well enough. Katz entered the newspaper bidding in early 2012 after receiving a call from Ed Rendell, who knew that the company—which had been bought out of bankruptcy by several hedge funds and banks in 2010—was again for sale. For years, Rendell and Katz enjoyed a close partnership: Katz helped fund Rendell’s political runs while making a mint off those parking garages and billboards.

Katz expressed interest in the papers and looked around for partners. Meanwhile, Rendell looped in cable mogul H.F. “Gerry” Lenfest. The other investors, including Liberty Property Trust CEO Bill Hankowsky, insurance executive Joe Buckelew and tech
CEO Kris Singh, all arrived via George Norcross—who had started exploring a bid to buy the company a few months earlier, after talking to Greg Osberg and John Angelo of Angelo, Gordon, one of the hedge funds that owned the papers.

There were questions, before the deal was even finalized, about men with such deep political connections running the region’s largest, most powerful media organization. In press coverage at the time, the new owners declared that they bought the company out of a sense of civic duty. But people close to the process say the owners talked, a lot, about making money. The papers and website had dropped in price from more than $515 million when former adman Brian Tierney bought them in 2006 to a little more than $55 million when Katz and Norcross allied to buy them.

But there are public reasons and private ones, and Katz likely had many motivations.

A Camden native, he was raised by his mother after his father died. He graduated first in his class from Dickinson School of Law, and spent time interning for Drew Pearson, the syndicated newspaper columnist and NBC radio personality. The relationship meant a lot to Katz, who asked Pearson to serve as the best man at his wedding and later named his only son after the newsman. Owning the Inquirer, in this context, likely appealed to a sense of nostalgia.

Of course, Katz must also have been motivated by Phillips, and people who know him say this personal tie certainly “added value” to the transaction. Even as Katz told Norcross he didn’t want to be involved in day-to-day operations, he started a major move without his new partner’s knowledge, and with Phillips by his side.

AT FIRST GLANCE, if there is a hero in this story, it would seem to be Bill Marimow.

The 66-year-old Marimow is a legend in modern American journalism, winner of two Pulitzer Prizes as a young reporter at the Inquirer and a symbol of the paper’s greatest days in the ’80s and ’90s. He left for the Baltimore Sun (where he eventually became editor), then became vice president for news at NPR. But in 2006 he returned for his dream job, serving as editor in chief of the Inquirer under the doomed ownership of Tierney. Marimow led the paper for four years, till the hedge funds took over. Then the new publisher, Greg Osberg, citing Marimow’s lack of expertise—and perhaps interest—in digital journalism, demoted him back to investigative reporting.

The ending hurt. But Marimow moved on, engaging in his second-best love, teaching, at Arizona State University. It was in Arizona, in early February of 2012, that he received a visit from Lewis Katz, who wanted to talk about the newspaper industry. The two men were friendly acquaintances, having dined together on couples’ dates with Phillips and Marimow’s wife. At the time of the Arizona visit, Katz seemed like a businessman prospecting a new venture. More discussions followed. And then, maybe six weeks after Katz’s initial visit, Phillips and Marimow started working out, by email, the terms of a deal for Marimow to return, including salary, autonomy, and the ability to hire two or three key editors.

For Phillips, the conversation must have been filled with promise. When Marimow became New Jersey editor in the late ’80s, he inherited Phillips, who’d been a correspondent in the bureau since 1985. He had mentored her, saw to it, through legendary editor Gene Roberts, that she was hired on full-time. Now she sat in a position to bring him back so he could end his career the right way, in the city where he was born.