Philadelphia Media Holdings got embarrassed by a Bloomberg report that revealed PMH had missed an interest payment on its $85 million in debt and had entered negotiations with its creditors to restructure the liability. PMH owns the Philadelphia Inquirer and the Philadelphia Daily News, the two newspapers serving the major market. This media corporation told Editor & Publisher that the information came from a conference call between PMH, its bankers, and financial analysts — and that no one should have leaked that information:
Owners of the Philadelphia Inquirer and Philadelphia Daily News say someone wrongly leaked information from a private conference call earlier this week that resulted in a Standard & Poor’s report on the ownership missing an interest payment.
Jay Devine, a spokesman for Philadelphia Media Holdings, declined to confirm or deny the report that the company missed a June 1 interest payment on $85 million of loans and is in talks with lenders for relief. But he said the report was the result of an improper leak by someone involved in the conference call just days ago.
“The report was the result of someone breaking a confidence of a conference call that was held the other day between the bankers, our company and financial analysts,” he told E&P Friday, declining to say what day the call occurred. “We will express our disappointment and try to reiterate the fact that they are confidential discussions and private discussions and ask people to honor that confidence.”
Initial reports have stated that Philadelphia Media Holdings “did not maintain the necessary senior debt-to-cash flow ratio — which can happen when cash flow shrinks — required by its senior lenders, according to Standard and Poor’s Leveraged Commentary and Data unit,” AP reported. “As a result, senior lenders blocked the company’s interest payments to $85 million in junior loans held by another group of lenders. That’s because senior lenders, who hold at least $295 million in loans, want to preserve the company’s cash for repayment of its own loans.”
When asked who might have leaked the information, Devine said, “We don’t have any idea, we are disappointed that it was leaked.”
Um, okay. A media outlet that complains about leaks; isn’t that somewhat akin to a yellowfin tuna complaining about sharks?
Given the PMH position on leaks from business conferences and proprietary negotiations, can we assume that the Inquirer and the Daily News will not in the future — and have not in the past — used leaks from exactly the same kind of sources? After all, if PMH finds leaks to other news organizations “disappointing”, then shouldn’t PMH refrain from exploiting the same kind of leaks? Or does PMH consider itself somehow more entitled than Bloomberg? Has any PMH article using leaks ever described them as “disappointing”?
Heavy Hand of Irony Alert #2: Apparently these questions never occurred to E&P’s senior editor, Joe Strupp. They certainly don’t figure into his article on PMH’s weird complaint about the industry in which it works.