The Philadelphia News Story

When Millionaire Contractor Matthew H. McCloskey sold his Philadelphia Daily News (circ. 192,401) to the Philadelphia Inquirer's Walter H. Annenberg last week, no one was more surprised than the News's publisher, David ("Tom") Stern III. Since taking over management of the ailing Democratic tabloid a year ago (TIME, Jan. 7), Philadelphia-born Tom Stern, 48, had cut its losses from $225,000 a month to $40,000 a month, and estimated that it would lose no more than $200,000 in 1958. "Given a reasonable amount of time, we would have had an independent and profitable enterprise," protested Stern, who also publishes the thriving New Orleans Item (circ. 105,560). Tom Stern had a six-year option to buy 50% of Owner McCloskey's Daily News stock (for less than $5,000), but, says he, "only four days before the sale, McCloskey told us that he was not impatient, that he would go along for another year."

Also puzzled were Philadelphia newsmen. Why did Walter Annenberg, whose staunchly Republican morning Inquirer has often feuded with McCloskey in the past, want the Democratic morning News (long known to Philadelphians as "The Dirty News")? Why had the Democratic Party's longtime National Treasurer Matt McCloskey capitulated? Though neither the civic-minded Inquirer (circ. 609,350) nor Robert McLean's quietly thorough afternoon Bulletin (circ. 718,007) paid more than cursory attention to the sale, the answers seemed clear enough. Hard-headed Contractor McCloskey, who had pumped some $5,000,000 into the News in his three years of ownership, was unable to resist Annenberg's offer to buy the rising paper, lock, stock and debt. Said McCloskey: "It was an expensive luxury."

And Publisher Annenberg, whose booming Triangle Publications will add the Daily News to its rich grab-bag collection (TV Guide, Seventeen, Daily Racing Form, Morning Telegraph), saw a promising opportunity for a light-feature and top-of-the-news sheet that will not try to match the intensive local coverage of his Inquirer or the prosperous Bulletin. Under its new publisher, the Daily News will go from a semi-morning paper (six editions, from midnight to noon) to one-shift afternoon publication (two editions, at 8:30 a.m. and 1 p.m.), in competition with the Bulletin. It will drop its pallid "weekend edition" (which goes to press on Friday night), remold its politics to an "independent" line closer to Annenberg's own views. Said one Annenberg aide: "In the Delaware Valley, with 5,200,000 people, there's room for such a paper." The new management also moved swiftly to cut the payroll, and by week's end had laid off 77 staffers, including 16 newsmen and some 30 truck-drivers. To News employees it was an old story. Just before Christmas last year, Matt McCloskey fired 64 (of 117) editorial staffers.

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