Tribune would ask to be paid back if Freedom’s assets are sold elsewhere.
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Tribune attorney Jeremy Rosenthal declined to comment on whether the loan was an indication of Tribune’s willingness to bid for Freedom’s newspapers. Last summer, Tribune Media joined a host of other media companies when it shed its publishing business-which included newspapers such as the Los Angeles Times and the Chicago Tribune.
Tribune informed a federal bankruptcy judge this week that it would be willing to loan Freedom Communications – the owner of those papers – the money to continue its operations, a move that could start a big bidding war for the valuable properties, according to an Associated Press report.
Freedom has gone through dramatic changes since Aaron Kushner, Eric Spitz and their 2100 Trust bought the privately held firm in 2012, after the company emerged from a previous bankruptcy. Freedom’s lawyers made their first court appearance Wednesday to get the case moving forward.
The loan proposal was offered to help the parent company of the Orange County Register and Riverside Press-Enterprise sustain its day to day expenditure as it tries to handle with a bankruptcy proceedings in a second round.
Also in the running to buy the Register is a local investor group led by Freedom’s current CEO, Rich Mirman.
Freedom outlined a plan for a $3 million loan from Silver Point Capital, which is already owed $19.46 million, to “pay employee wages and benefits, procure goods and services integral to the debtors’ ongoing business operations, fund certain operational expenses … maintain ordinary course relationships with vendors, suppliers and customers, and satisfy working capital needs in the ordinary course”.
Tribune is looking to build a regional newspaper empire that could overcome industry challenges through cost-cutting consolidation.
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The “why”: Advertising revenue, excluding the San Diego Union-Tribune acquisition, fell 9.6 percent year-over-year.
