• by Erik Sass  @eriksass1, November 9, 2006

Amanda Bennett will step down as editor of The Philadelphia Inquirer, the company announced yesterday--becoming the second casualty at a big regional daily. She follows Dean Baquet, who was fired as editor of the Los Angeles Times on Tuesday, after refusing to make drastic cuts in the newsroom staff. Bennett's departure underscores the fact that alternative ownership models, such as buybacks by local investors, provide no panacea from layoffs.

The decision to let Bennett go was made by the newspaper's new publisher, Brian Tierney, previously a local ad heavyweight and now CEO of Philadelphia Media Holdings. Tierney is a trailblazer for a new movement sweeping the newspaper business: Local investors who have bought, or expressed interest in buying, troubled regional dailies from big holdings companies--in the case of the Inquirer, the McClatchy Company.

Leading a group of investors, Tierney bought The Philadelphia Inquirer, sister paper Philadelphia Daily News, and associated online properties like Philly.com for $562 million in May.

At the news conference announcing the purchase, Tierney vowed an end to the strategy of "cut, cut, cut for short-term profits" that typified corporate ownership. Less than five months later, Tierney was quoted as saying that substantial layoffs at both papers are "unavoidable" in light of long-term structural trends affecting the newspaper industry. Rumors are circulating that he plans to ax as much as 30% of the newsroom--about 150 people.

Initially, Tierney made much of the fact that all the newspapers' investors were local businessmen or organizations, including Bruce E. Toll, vice-chairman of Toll Bros. Inc., a large home-construction company and owner of two large car dealerships; William A. Graham IV, chief executive of a big commercial and government insurance brokerage; and Leslie Brun, a prominent investment manager. More investment came from the Carpenters Pension and Annuity Fund of Philadelphia and Vicinity.

As a privately owned business, it was hoped the Inquirer would be freed from stockholders' relentless pressure on publicly traded companies to produce big profits and keep stock prices up. And because they're local figures with personal ties to the community, the new owners would be more sympathetic to quality journalism, supporting editorial integrity over the profit.

Meanwhile, in contentious contract negotiations, managers representing the local investor consortium have told the Newspaper Guild--which represents the papers' employees--that they intend to stop making contributions to employee pensions.

Although no explanation has been given for Bennett's departure, it may be a harbinger of things to come. If that's the case, the scenario resembles Baquet's ouster from the Los Angeles Times: The editor of a venerable publication, stuck in an increasingly less genteel decline, refuses to go along with owners' orders to wield the hatchet--and becomes the first victim. The only difference here is that the Inquirer is now privately owned.

Late Wednesday, it was also reported that Eli Broad and Ronald W. Burkle, two billionaires from the Los Angeles area, were submitting a bid for the entire Tribune Company. Although the deal would bring them possession of many properties outside the Los Angeles area, a desire to own the Los Angeles Times is seen as one of their key motives.

Bennett's departure comes as a group of prominent local investors, led by former GE chairman and CEO Jack Welch, considers buying the troubled Boston Globe from the New York Times Company. Another group, led by Hollywood mogul David Geffen, has expressed interest in buying the Los Angeles Times from the Tribune Company. Both groups say local ownership would benefit the papers. In light of recent history at The Philadelphia Inquirer, however, it's an open question whether changes in ownership can relieve problems caused by market pressure and long-term trends in media usage.