Bankruptcy judge approves Digital First Media purchase of Freedom Communications assets
The new owners of the Orange County Register and Riverside Press-Enterprise, today changed the name of their SoCal group to the Southern California News Group, has themselves gone through several bankruptcy proceedings in recent years
The bankruptcy judge overseeing the sale of Freedom Communications assets has approved the sale to Digital First Media, the newspaper company that owns the Los Angeles Daily News and other Southern California newspaper properties. In response, the Los Angeles News Group will now become the Southern California News Group.
“SCNG now owns 11 Southern California daily newspapers and more than a dozen community weeklies, ranking among the top five nationally in Sunday circulation and among the top six daily. SCNG will reach more than 6.3 million unique visitors on digital platforms each month, drawing 22 million page views,” Ron Hasse, chief executive of the group, wrote to staff.
“The Orange County Register is a world-class news organization known for innovative and quality journalism and advertising. It has won three Pulitzer Prizes and, for more than a century, been the region’s go-to and trusted news source. The Press-Enterprise shares the Register’s outstanding reputation, has also earned a Pulitzer and is equally revered among its readers and advertisers,” Hasse wrote.
“Soon, we will welcome gifted and talented new colleagues, and together, we will be one of the most dynamic news organizations in the world.”
The purchase of Freedom by DFM comes after it appeared that Tribune Publishing, which owns the Los Angeles Times and the San Diego Union-Tribune in Southern California, had won the bidding auction with a $56 million bid. But the Department of Justice had warned lawyers for Freedom Communications that they might seek a temporary restraining order to hold up the sale should they select a bid from Tribune. They did, and the DOJ did as promised and filed. When the retraining order was granted after District Judge Andre Birotte Jr. said in that the government showed “a likelihood of success on the merits of its claim,” representatives for Freedom reversed course and selected the bid from Digital First Media. DFM’s bid was lower that Tribune’s at $52.3 million, but would not likely be resisted by the DOJ.
The loss by Tribune must come as a disappointment to Chicago management, which for a while had to like the prospect of having a monopoly on major newspaper properties from LA County south to San Diego. But now, Tribune might decide to reverse course and sell off its California assets. Tribune Publishing, after all, was spun out from The Tribune Company to start life with a massive debt load. Selling off the Times and Union-Tribune might lessen that load considerably.
Following restructuring charges, Tribune Publishing barely reported a profit in 2015, with revenue only rising 1 percent despite the edition of the San Diego newspaper property. Tribune was hoping the addition of the Register and Press-Enterprise would allow them to slash costs by consolidating production, distribution and editorial staffs.
Unfortunately, the DFM win will not prevent the same kind of consolidation from taking place as the new owner will also look to make staff cuts and central services. In fact, DFM has a far bigger reputation for such moves than does Tribune, so this may turn out to be the worst possible outcome for staff at the Freedom Communications papers.