UPDATE: Deal for Philly Papers Could Be Announced Today

By: E&P Staff A deal to sell The Philadelphia Inquirer and the Philadelphia Daily News to a group of local investors could be announced as early as today, the Inquirer's Joseph DiStefano reports this morning. It is only "pending final approval from bankers who are financing the deal, according to people familiar with the sale," he writes.

"Philadelphia Media Holdings L.L.C. and the McClatchy Co. waited late last night for that final approval, according to people familiar with the talks. The group's organizer, Brian P. Tierney, dined on takeout from La Collina at his Gladwyne office, while in Center City lawyers with Dilworth Paxson L.L.P. pored over last-minute paperwork. At the Four Seasons hotel, P. Anthony Ridder, chairman of the newspapers' current owner, Knight Ridder Inc., had dinner with the newspapers' publisher, Joe Natoli....

"Local investors involved in Philadelphia Media Holdings plan to put in at least $200 million of their own money, with Royal Bank of Scotland (owner of Citizens Bank) and other lenders financing the rest."

On Monday, the Inquirer and the Wall Street Journal reported that McClatchy was close to striking a deal to divest The Inquirer and Daily News.

Along with Tierney other investors in Philadelphia Media Holdings include Bruce E. Toll, co-founder of construction firm Toll Brothers, and investment manager Leslie Brun.

Reportedly the group put in a bid for over $500 million, a source told the Inquirer. MediaNews Group initially placed a bid for $575 million but the paper said the bid had conditions.

Tierney represented the Philadelphia Archdiocese of the Roman Catholic Church and has crossed swords with the paper in the past. He is also a Republican Party activist. According to the Inquirer, Tierney "has pledged to withdraw from political activity if his group's bid is successful, and says that his partners have agreed to respect the newsroom's independence."

The Knight Ridder papers have tended to endorse Democratic candidates in the past.

Tierney did not return a call E&P placed seeking comment.

It's unclear whether other players are still in the process. Robert Hall, who is helping the union-backed Yucaipa Companies, declined to comment to E&P on the proceedings because he signed a Non Disclosure Agreement.

A spokeswoman with Mortimer Zuckerman, owner of the Daily News in New York who has reportedly expressed interest in the papers, also said she could not comment.

The Associated Press recalled interviews with Toll and Tierney that offered some idea of what changes they might install. The AP reflections follow.

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In an interview with The Associated Press in late March, Toll said his goals would include adding more local content and getting news out faster on the Inquirer Web site.

In stressing the need to add local content, Toll said: "I know more about New York from reading The New York Times than about Philadelphia from reading the Inquirer." Toll's investment would not involve Toll Bros.

Toll said the Inquirer needs to add more local reporters, including in the city, and needs to expand its local business coverage. He said information, including sports scores, needs to be filed faster to the newspaper's Web site.

"You get the scores from other sources faster than the Inquirer," he said.

Tierney told the Inquirer last month that he wants to make the paper more "fun" to read and complained that the newspaper's efforts to expand into the suburbs had been "halfhearted." To boost the bottom line, he said he would consider introducing ad-rich business and sports weeklies and expand coverage downtown to draw real estate ads.

He said he would preserve the newspapers' editorial independence.

Both Toll and Tierney have said the newspapers would play it down the middle politically.