1978 Called. It Wants Its Newspaper Back
“So what?” he replied. “We’re going to be the best at what we do. We need to charge people accordingly.”
Today, Stengel Austen remembers the moment fondly: “He knew that if he created that kind of aura and we backed it up with our work, the clients would believe we were the best. It was a self-fulfilling prophecy.”
For a kid whose parents worked a succession of blue-collar jobs — deli man, cabdriver, waitress — to pay his tuition at prestigious Episcopal Academy, Tierney’s subsequent ride to the top was particularly delicious, and replete with obvious and poignant symbolism. He ensconced his ad firm, for instance, in the Bellevue, where his mother once waited on tables.
By 2006, Tierney had risen high enough in Philadelphia’s social and business circles to draft a veritable hot list of the city’s monied that ponied up roughly $150 million in cash to buy the two papers, among them Bruce Toll, of the Horsham-based Toll Bros. home-building company; insurance executive Bill Graham; cable heiress Patricia Harron Imbesi; and Liberty Ventures fund principal Katherine Crothall.
Together, Philadelphia Media Holdings borrowed some $350 million to outbid its competitors, winning what now qualifies as a booby prize. Tierney, though, isn’t alone in having jumped aboard an enterprise aimed squarely toward its nadir. In 2006, a number of older men with money expressed interest in owning newspapers: real estate magnate Sam Zell, music mogul David Geffen, philanthropist and art collector Eli Broad, billionaire Ron Burkle. There was a reason no one younger purchased a newspaper, a reason no monolithic Internet company like Google is looking to hire some reporters and fire up a printing press. The reason is that the people who did buy papers, like Tierney, were gazing through eyeglasses ground in the Watergate era, when newspapers held an unshakable place in the firmament of the public’s imagination.
Only this kind of generational myopia could explain why so many wealthy men lined up to join a dying industry. Tierney didn’t have Zell-like resources. But he had connections, unbridled charisma — and the button-bursting zeal to take on the Inquirer and Daily News and muscle them into a new age of newspapering.
Tierney’s judgment proved to be horrendously bad. Murray D. Schwartz was the publisher for 12 years of a chain that operated about 30 publications in the Greater Philadelphia region, including the Pottstown Mercury. Now a New York investment analyst, Schwartz says he advised one member of the PMH investment group not to get involved. “The price they paid was ludicrous,” says Schwartz. “I think there was way too much enthusiasm for the idea of, you know, ‘We’re going to own the local paper.’” The problems he saw included the price, projected revenue and readership declines, the difficult union contracts at the Inquirer and Daily News, and the strong ring of suburban papers surrounding the city. “There’s nowhere to grow,” says Schwartz. “Anyone who bought these papers would face that problem, because as your local readership gets smaller, which it’s going to because of the Internet, you have to expand your reach geographically. Those papers are boxed in.” According to industry analyst John Morton, the Inquirer and Daily News are now probably worth less than half of what PMH paid for them — and there’s more.
