PHILADELPHIA - McClatchy Co. is selling The Philadelphia Inquirer and the Philadelphia Daily News for $562 million to a group of local investors who hope to reverse circulation declines by emphasizing local news and doing more with the Internet.
The two Philadelphia papers are being bought by a group led by advertising executive Brian Tierney and Bruce Toll, co-founder of luxury home builder Toll Brothers Inc. The papers are among 12 currently owned by Knight Ridder that McClatchy plans to sell.
McClatchy and the investor group said in a statement that they intend to complete the deal around the same time that McClatchy closes its deal for Knight Ridder, which is expected this summer. McClatchy will receive $515 million in cash, and the investment group, Philadelphia Media Holdings, will assume $47 million in pension liabilities.
Once McClatchy closes its purchase of Knight Ridder's remaining 20 papers, it will become the second-largest newspaper company in the country following Gannett Co.
The deal returns the Philadelphia papers to private ownership for the first time since 1969, when Walter H. Annenberg sold the papers to Knight Newspapers Inc. after being named U.S. ambassador to Britain.
''The next great era of Philadelphia journalism begins today with this announcement,'' Tierney said. ''We intend to be long-term owners committed to serving this region with the vigorous, high-quality journalism we all expect of The Philadelphia Inquirer, Daily News and philly.com, and we intend to preserve both papers and their unique and valuable contributions.''
Tierney, speaking at a news conference at the newspapers' building, said the new ownership group does not plan to cut jobs.
''We didn't buy it to cut it,'' he said. ''We want to grow these publications, not try to manage the decline.''
Tierney and Toll said that they want to improve the Inquirer's local news coverage and Internet presence.
The sale of the two papers is part of McClatchy's plan to divest 12 of 32 newspapers it bought from Knight Ridder for about $4.5 billion plus the assumption of $2 billion of debt. Most of the publications being sold were
targeted because they don't fit McClatchy's long-standing criteria of buying newspapers in growing
In the six-month period ending in March, the Inquirer's weekday
was nearly 350,500, according to the Audit Bureau of Circulations, down 5.1 percent from the like period a year ago.
The Philadelphia papers' combined circulation last September was down 30 percent from its peak in the 1980s.