Philly papers begin ‘Keep It Local’ campaign

PHILADELPHIA (AP) — The owners of Philadelphia’s two major newspapers are trying to rally support for local management of the business — taking on banks and other creditors that hope to win the company in a bankruptcy auction. And the creditors are trying to get the campaign stopped.

The “Keep It Local!” slogan is blasted in full-page advertisements in The Philadelphia Inquirer and Philadelphia Daily News, on Philly.com’s home page and on delivery trucks, buttons and even subscriber bills.

The ads suggest that outside owners — “banks and hedge funds located in New York, Beverly Hills and elsewhere” — would slash news coverage and staff and perhaps close the smaller Daily News. The creditors object to the publicity blitz and want a bankruptcy judge to shut it down. They call the campaign “scare tactics” designed to demonize any outside bidders.

“The debtors have attempted to poison the prospects for any competing bidder ... with the debtors’ unionized work force, with advertisers and with the community,” a committee for some of the newspapers’ creditors said in a filing Wednesday. “This is the antithesis of what the law requires.”

A judge Thursday scheduled a hearing on the objection next week.

The two sides have fought bitterly since the owners of The Philadelphia Inquirer, Philadelphia Daily News and Philly.com filed for bankruptcy protection in February, citing about $400 million in debt.

The senior lenders are led by Citizens Bank — which has naming rights on the Philly’s baseball stadium but is owned by the Royal Bank of Scotland Group PLC. The group also includes CIT Group Inc. and hedge funds and investment banks, including Angelo, Gordon & Co., which has a Beverly Hills office.

Philadelphia Newspapers LLC, the company that owns both local dailies, proposed the auction in a bankruptcy reorganization plan filed last month. Bids are due Oct. 22.