PHILADELPHIA (AP) — The warring owners of Philadelphia's two major newspapers failed to resolve their fight for control after several hours of private talks Wednesday, leaving a judge to sort out the public feud.
Rival co-owners George Norcross and Lewis Katz are both rich, powerful and accustomed to being in charge. Unless they find a way to work together, The Philadelphia Inquirer and Philadelphia Daily News could be sold for the sixth time in seven years, or the current ownership group could be reconfigured.
Norcross is a Democratic powerbroker in southern New Jersey who built his wealth in the insurance industry. Katz made his fortune in parking lots, real estate and a stint owning the New Jersey Nets.
Each pledged not to meddle in the newsroom when they bought equal 26 percent stakes of the company last year, for $16 million apiece. Four others bought lesser stakes. But Katz and Norcross control major decisions.
Katz sued last month, accusing Norcross of trampling his voting rights by unilaterally firing Editor Bill Marimow. Norcross countersued. Common Pleas Judge Patricia McInerney, after hearing several days of testimony, did not immediately rule on Katz's request to block the firing.
Katz and Norcross accuse each other of meddling in newsroom operations despite a non-interference pledge they took after buying the newspapers in April 2012. But the pledge seems almost doomed from the start. Both powerful businessmen have close ties inside the newsroom.
Katz's longtime companion, veteran reporter Nancy Phillips, has become city editor. And Norcross' daughter came aboard to help oversee digital operations, including the Philly.com website.
Phillips testified last week that she helped bring Marimow back to the Inquirer for a second term as editor, introducing him to Katz and Norcross. She said she also helped draft a cover story to suggest Marimow was hired by then-Publisher Greg Osberg. Osberg left weeks later.
His successor, Bob Hall, fired Marimow last month. Katz, in his testimony, cast Hall as a highly-paid puppet who carries out Norcross's editorial agenda.
"What's at stake is the independence of The Philadelphia Inquirer," Marimow lawyer Bill Chadwick said Wednesday.
The company's board chairman, philanthropist H.F. "Gerry" Lenfest, testified that he invested $10 million as a civic gesture, only to watch Norcross wrest control of decisions large and small.
"Everything is really done (under) the direction of Norcross," said Lenfest, who signed on to Katz's lawsuit.
Norcross — who wielded most of his political power behind the scenes — was expected to testify Wednesday, but chose to stay off the stand.
Katz's lawsuit seeks to return Marimow as editor and oust Hall on grounds that his contract has expired. The judge has declined to remove Hall, at least for now.
Newsroom employees — including editors, reporters and photographers — have endured pay cuts, annual two-week furloughs and staff reductions as a series of owners have tried to turn the company around.
The company's sale price has dropped from $515 million in 2006 to $139 million in a 2010 bankruptcy auction to $55 million last year.