Philadelphia.

Today's NYT reports on the sale of the two major dailies in Philadelphia to a group of local investors. The Inquirer and the Daily News were owned by Knight-Ridder, whose stockholders forced a sale this year to McClatchy, who in turn has been auctioning off the newspapers that don't fit into its business plans. To newspaper readers, the Inquirer is the most important of the Knight-Ridder newspapers, and, in the days when prestige counted for something in the industry, would have been the most valuable property. The most important information in the NYT article by KQ Seeley comes at the end:

Knight Ridder's profit margin in 2004 was 19.3 percent, about average for the industry. Morgan Stanley, which examined the company before its sale, said the profit margin in Philadelphia was 9 percent, while company executives said it was somewhat higher, even with severance payments last year as the papers trimmed their staffs.

Both papers have been losing circulation at rates that exceed the industry average.

Circulation at The Inquirer, once the jewel of the Knight Ridder chain, fell to 350,457, a drop of 5 percent, for the six-month period ended March 31, compared with the period the year before. Circulation at The Daily News dropped 9.4 percent, to 116,590.

The average circulation loss for the industry was 2.5 percent.

In other words, even with the falling circulation, and taking significant one-time losses, both newspapers together turned a fair profit last year; no doubt without the one-time losses, the Inquirer's profit was about the industry average, approaching 20%. Why doesn't McClatchy want this newspaper?

The group buying it consists of ten local owners, mostly businesses, with the lead buyer being an active Republican and someone news professionals are wary of. Wouldn't it be nice if the journalists themselves could buy up properties like this? (I'd include the Sun-Times, which is always on the market somehow) Wouldn't it be nice if some kind of public entity could make that possible? These owners are going to treat the paper either like a sports franchise--an ego trip occasion--or like a subsidiary to their main businesses; I predict it will be on the market again soon. Pay attention to the countries where newspapers still work!