ASSOCIATED PRESS: Philadelphia Newspapers hopes to use $35 million in new capital to settle nearly $400 million in debt and emerge from bankruptcy. An opposing creditors’ plan would leave the newspapers saddled with up to $85 million in debt, making it difficult for The Philadelphia Inquirer and Philadelphia Daily News to survive, a company lawyer said Tuesday. Lawyer Larry McMichael offered broad outlines of the competing reorganization plans after a hearing Tuesday, but neither has been filed in court. A new judge handling the case chided various parties involved Tuesday for offering “untenable” options to resolve the company’s finances, which McMichael described as “under water.” “To one degree or another, everyone involved … is overplaying their 
hand,” Chief U.S. Bankruptcy Judge Stephen Raslavich said. He ordered all sides — the company, creditors and the union representing writers and photographers — to stop bluffing or risk having the city’s two largest dailies fold. MORE
RELATED: Philadelphia Newspapers, the company that publishes the Philadelphia Inquirer, admitted in court filings last week that if it does not get a proposed loan, it would have to cease publication. “Absent the proposed DIP facility and the use of the cash collateral, the debtors likely will be unable to pay their ordinary business expenses, including employee wages,” said the filing. “In that event, all operations will cease — employees will be terminated, the Philadelphia Inquirer will no longer be published, and all assets on which the prepetition senior lenders assert a lien will be liquidated.” MORE
PREVIOUSLY: A PRAYER FOR THE CITY: God Save The Philadelphia Inquirer And Daily News And All Who Sail On Them
RELATED: You could almost hear the sighs of relief in the hushed, thickly carpeted corridors of high-powered media executives on Aug. 6, when News Corp. chairman and managing director Rupert Murdoch announced that he was going to start charging for online news content by July 2010. At last, they exulted, somebody was jumping in and demanding that consumers pay for a product that has been given away for nothing on the Web. And even better, that somebody was not them. “Quality journalism is not cheap, and an industry that gives away its content is simply cannibalizing its ability to produce good reporting,” Murdoch said during a call with analysts and reporters. The Wall Street Journal, which he owns, is one of the very few news operations to charge users to see its content online. Now he wants to put all his sites — News Corp. is the biggest producer of news in the English-speaking world — behind a pay wall. That includes the online output of papers that run the spectrum of quality all the way from the snobby Times of London to the grubby New York Post, not to mention broadcaster Fox News Channel (FNC). MORE
[via MARRIED TO THE SEA]