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Philly Newspapers Still Awake

Legendary investor Warren Buffett, himself an owner of a big chunk of Washington PostCo. (NYSE: WPO  ) , has long said that newspapers are in a state of permanent decline. You'll have to forgive Brian Tierney if he disagrees.

"I reject the idea that they (newspapers) are in an inevitable decline," Tierney, the new chief executive of The Philadelphia Inquirer, told The Associated Press in a recent interview. Tierney, a former PR and advertising executive, this week teamed with Bruce Toll, co-founder of home builder Toll Brothers (NYSE: TOL  ) , and several others to buy the Inquirer and The Philadelphia Daily News from McClatchy Newspapers (NYSE: MNI  ) for $515 million in cash and $47 million worth of assumed pension liabilities.

McClatchy is raising funds for a $4.5 billion buyout of Knight Ridder (NYSE: KRI  ) , which it agreed to in March. The two Philly fishwraps are among 12 acquired papers McClatchy hopes to sell for cash. And so far, the plan is working: The San Jose Mercury News and Contra Costa Times together fetched $1 billion from Denver's MediaNews Group last month.

But McClatchy isn't the big winner in this deal. Philadelphia is. Not only does it get to keep both hometown papers, but it also inherits local owners who have pledged to invest in the business. After years of layoffs, that's the least the beleaguered newsrooms of the Inquirer and Daily News deserve.

Still, some see a dark side to this deal. The concerns have to do with Tierney, who is widely known for his aggressive style, which he often brought to bear on behalf of PR clients who received less-than-favorable treatment in Philly papers. Skeptics such as Inquirer columnist Monica Yant Kinney wonder whether Tierney has, in fact, left the PR world completely. Will he pitch a fit when one of his friends -- maybe even a former client such as NutriSystem (Nasdaq: NTRI  ) -- takes a beating in his paper?

Tierney says no. And you know what? I believe him. There is life after PR, Fool. I know because I was in the business for 15 years. And if you don't think it's possible to ever nakedly tell the truth about a former client, read this. I was front and center pitching BEA Systems (Nasdaq: BEAS  ) in the late '90s because I believed in its story. I've no regrets about that work, or the story you just read. Each time I argued for a position I believed in.

So let's get past the hysteria and realize that the newspaper business is changing. Content isn't enough. Marketing matters. That's why Tierney's rein, as well as the new marketing-oriented leadership of Dow Jones (NYSE: DJ  ) , will become a litmus test for the rest of the industry. Greg Matusky, owner of local Philly PR firm Gregory FCA, says it best, "The Inquirer isn't dead, but it is losing market share."

Indeed, it needs something. And Tierney may be it.

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Fool contributorTim Beyerswas a newspaper reporter years ago. He doesn't miss the newsroom much, but he envies those who toil at it successfully. Tim didn't own shares in any of the companies mentioned in this story, although he has in the past been a contract writer for clients of Matusky's firm. You can find out which stocks he owns by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.

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