Freedom Communications Inc., owner of the Orange County Register, has chose to sell its flagship publication, along with the Riverside-based Press-Enterprise, to Digital First Media, according to a company attorney. None of the major players objected to the deal.
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“The $52.3 million offer prevailed over a competing bid from the parent company of the Los Angeles Times, which faced an antitrust battle in its effort to build a media empire stretching from the Mexican border to Los Angeles”, the Times reports.
Freedom Communications lawyer William Lobel told Talking New Media that they will ask the judge today to approve Digital First Media as the successful bidder.
Attorneys made it clear that the deal with Digital First Media – which was due to run out of financing on March 31 – couldn’t wait for legal proceedings with Tribune to play out. “Development of the L.A. Times and California-based acquisitions, such as LA.com, are critical to our strategy to drive revenue for Tribune Publishing and demonstrate the value of journalism”. “We are dedicated to bringing stability and a renewed sense of objective to these two great newspapers”. We are also excited about providing advertisers a broader platform from which to deliver their messages..
“Tribune Publishing is very disappointed that the antitrust division of the U.S. Department of Justice, at the 11th hour, sought and obtained a retraining order which blocked Tribune from acquiring the debtors’ assets after it was selected as having the highest and best bid at Wednesday’s auction”, said attorney Jeremy Rosenthal, representing Tribune.
That became a challenging affair. The Justice Department quickly filed a lawsuit with the U.S. District Court in Los Angeles saying the sale to Tribune posed antitrust problems and had the potential to harm subscribers and advertisers in the Orange County area.
Tribune Publishing’s hopes of acquiring The Orange County Register and the Riverside Press-Enterprise have been dashed by Digital First Media. When it was all done, past 10 p.m., all three bidders had beefs about the process.
Digital First was the runner-up bidder for Freedom at $45.5 million. Which I guess preserves a semblance of competition in the SoCal newspaper market, but the Digital First Media papers locally aren’t exactly models of fiscal health.
The next day, Justice attorneys sued to block Tribunes purchase.
The decision comes after a federal judge halted the sale of the papers to Tribune Publishing, the owner of the Los Angeles Times and San Diego Union-Tribune, with a temporary restraining order late Friday night.
The Justice Department praised Mondays announcement of Digital First as the buyer.
In his ruling, Birotte said the government has shown “a likelihood of success on the merits of its claim”, the Los Angeles Times reported. But Birotte was unmoved, writing that “consumer access to local news is at stake” and that local papers are “important to a healthy democracy”.
The company is owned by Alden Global Capital, a private hedge fund known for investing in distressed newspapers.
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In the time between Freedom’s two bankruptcy cases, it was acquired by Boston investor Aaron Kushner for about $50 million, but the company continued to bleed red ink.
