STEVE INSKEEP, HOST:
Philadelphia's financially troubled newspapers - the jointly owned Inquirer and Daily News - may be sold for the fourth time in six years. Readers may not know all the angles behind this story. AS NPR's David Folkenflik found, the publisher has killed stories about the sale while the leading bid appears to come from a group of powerful figures who are frequent subjects of the papers' reporting.
DAVID FOLKENFLIK, BYLINE: The Philadelphia Inquirer, a storied paper with a rich legacy of investigative reporting; and The Philadelphia Daily News, its scrappy sister tabloid, are found in the landmark building they've inhabited for decades. The appearance of permanence can deceive. The building was sold last year. Inquirer reporter Craig McCoy sits on a mezzanine overlooking a cavernous newsroom below, and he shakes his head as he thinks about a new round of layoffs and buyouts.
CRAIG MCCOY: We've faced a constant battle here of cutbacks and reductions in staff, even as our obligations have grown. With all that said, I mean, the paper remains a great newspaper, and it's full of hard-hitting stories and beautifully written pieces every day.
FOLKENFLIK: Now, the hedge funds that own the newspaper's bankrupt parent company, the Philadelphia Media Network, are putting it up for sale. Earlier this month, local developer Bart Blatstein put out a press release saying he wanted to bid for the papers. Daily News political reporter, Dave Gambacorta, wrote a brief blog item and describes what happens next.
DAVE GAMBACORTA: The blog post was pulled down. We reposted it, and it was pulled down a second time and later replaced with a statement from the Philadelphia Media Network, which indicated that they were not currently negotiating with Mr. Blatstein.
FOLKENFLIK: This made no sense at all, as Gambacorta points out.
GAMBACORTA: By that point, the blog post had made the rounds on the Internet. A number of journalism websites had looked at it. A number of local readers had seen it. So when they were trying to click some links that I had put on Twitter and other places, they were finding a dead end.
FOLKENFLIK: A spokesman for the company took responsibility and later apologized. But journalists at the papers with direct knowledge of what occurred say it was publisher and CEO, Greg Osberg, who had killed a similar Inquirer story the day before.
Osberg then appears to have lied to the New York Times about having an argument with editors over the incidents. Dave Gambacorta:
GAMBACORTA: It's our job to ask tough questions, to shine a light on things that need to be examined. So to think that we were now actually going to be stopping ourselves from doing basic reporting on something as simple as the sale of our company, it raised a lot of troubling questions.
FOLKENFLIK: Hundreds of staffers signed a petition demanding a guarantee of editorial integrity, and executives promised no more interference. But Osberg's acts take on even greater weight because of who might own the papers next.
A group seeking to buy them includes two of the region's most connected Democrats: former Mayor and Governor Ed Rendell, and New Jersey political boss George Norcross III. Both men and their associates have been subjects of intense reporting. Former Inquirer columnist Buzz Bissinger asked Rendell about those ties on local radio station WPHT, earlier this week.
BUZZ BISSINGER: You're the man. So you know, you know more people in this state than anyone else. All these people are newsmakers...
ED RENDELL: You're acting as if this would be the first time that a group of people, similarly situated, own a newspaper. I mean, Walter Annenberg owned the Inquirer and Daily News, and he certainly was a power player that had tremendous business interests and tremendous ideas of what he wanted to do and what he didn't want to do.
FOLKENFLIK: It's worth nothing that a late Walter Annenberg was considered one of the nation's most morally corrupt newspaper publishers of his era, pushing those interests and reviling his enemies in his news pages, not just in the editorials.
Rendell promised a firewall separating his ownership group from the newsroom's reporting. The Pulitzer Prize winning reporter Wendy Ruderman of The Daily News, points out just such a tradition of newsroom independence has been breached.
WENDY RUDERMAN: There's a whole trust issue now. We're terrified, terrified, that we're going to step on more land mines and not be able to do our jobs. And then we're not journalists anymore. We're not.
FOLKENFLIK: After the sale of the building, Ruderman says the newspapers' only remaining asset, the only thing they can offer their readers, is credibility.
RUDERMAN: If you're addicted to journalism like I am, if you love it, if you don't know what else you would want to do, then what's happening right now is kind of heartbreaking. It's really heartbreaking. And I think there's been so much stress here. This place is, like, imploding with stress.
FOLKENFLIK: It's not yet clear who will ultimately own the papers. If the hedge funds can't get a desired price, they may keep them and start cutting the newsroom in earnest.
David Folkenflik, NPR News.