INQUIRER: Bidding for Philadelphia Media Holdings, which owns the Inquirer, Philadelphia Daily News, and Philly.com, began at 3:45 a.m. today, nearly 17 hours after three groups vying to own the media company first gathered in a law office in midtown Manhattan. As of 5 a.m., no decision had been made as to which bid was in the lead, although all three bids had been gone through by the group. MORE
KAREN HELLER: For the third time in four years, Philadelphia’s two major daily newspapers are facing potential change in ownership. The lead-up to 
this week’s auction included a whiplash switch of suitors and ulcer-inducing accusations, especially if you happen to earn your living from newspapers. California billionaire Ron Burkle, at the behest of Gov. Rendell, was in. He was out. Enter the Perelmans, Raymond G. and Ronald O., of the museum, theater, and Revlon. And Canadians descended from the north. A lawyer for the local group of investors testified that the creditors would terminate the current staff of 4,500, requiring employees to reapply, then hiring only half – a disclosure that was countered as “unfair and despicable” by one of the creditors’ lawyers. Bidding hadn’t begun as Tuesday night turned to Wednesday, long after the auction was scheduled to start. MORE
BUSINESS WEEK: Revlon chairman Ronald Perelman and his philanthropist father are pledging up to $27 million toward a local bid for Philadelphia’s two largest newspapers at a bankruptcy auction under way in New York. MORE
DAILY FINANCE: “The Philadelphia Inquirer is a venerable institution that should continue to be owned by local interests,” the family says. “The Perelmans and their partners have strong ties to the region, the schools, the hospitals and the cultural institutions of Philadelphia. They want to ensure that this great newspaper and its workforce continue to serve the people who depend on it every day.” As the Inquirer noted, the local investors include William A. Graham, chief executive officer of the Graham Co., a Philadelphia regional insurance broker; the Carpenters Union pension fund; philanthropist David Haas; and Bruce E. Toll, vice chairman of home builder Toll Bros. (TOL). MORE
FORBES: If Perelman and his group win, he will be the latest in a long line of billionaires to have bought into the struggling newspaper industry–with mixed results. The World’s richest man, Slim Helu bought 7% of the New York Times in 2008, and made a $250 million loan to the newspaper in 2009. Sam Zell purchased, levered up and ultimately bankrupted the Tribune Corp. in 2008. (He put down just $300 million to buy the company then worth an estimated $8.2 billion), Tom Gores’ Platinum Equity acquired the San Diego Union-Tribune for $50 million in May of 2009. News Corporation’s Rupert Murdoch famously bought Dow Jones (publisher of the Wall Street Journal) for $5.6 billion in 2007. MORE
REUTERS: Unions warned of a possible strike if the winning bidder at Tuesday’s auction of the publisher of The Philadelphia Inquirer slashes staff at the newspaper, a threat that could affect the auction. “If upon conclusion of the bidding the successful bidder, whoever that is, does not immediately confirm in writing that it will maintain the status quo with respect to the employment of our members under the existing terms, we are presented with a notice of mass layoffs … we will have no choice but to react appropriately,” said a statement from Joseph Lyons, the president of the Philadelphia Council of Newspaper Unions. Lyons told Reuters a strike was one possibility. MORE
UPDATE: The company’s senior lenders in the meantime have withdrawn a controversial provision of their opening bid that would have required all the company’s employees to be initially fired and only guaranteed just over 50 percent would be rehired. MORE
UPDATE: “We had 3 bids,” said attorney Lawrence McMichael, of the law firm Dilworth Paxson, regarding today’s early bidding. “Those bids were an apple, a watermelon and a monkey wrench. We need to try to get them on to a common base so there could be some intelligent bidding.” He declined to elaborate, adding that “it’s been a very successful auction in that there have been many bids.” MORE