March 21, 2016 Last Updated 5:09 pm

Freedom Comm. lawyers say they will support Digital First Media bid over Tribune Publishing

Morning Brief: Rough day for Nick Denton and Gawker Media as jury awards $113 million in Hulk Hogan trial, now things could get even worse as punitive damages phase begins

Tribune Publishing may have lost their bid to win the Orange County Register after all, after lawyers for Freedom Communications said they would support the bid by Digital First Media after the Department of Justice filed a lawsuit to try and delay or stop the sale to Tribune.

“We’re going to go in and ask the judge on Monday to approve (Digital First Media) as the successful bidder,” Freedom Communications lawyer William Lobel said.

OCR-flagThe move comes after District Court Judge Andre Birotte Jr. issued a temporary restraining order halting the sale to Tribune.

“It may be that Tribune will lose the opportunity to acquire the Register and Press-Enterprise in favor of the second place bidder,” Birotte said. “However, this private harm does not outweigh the public interest in the preservation of competition, especially given the government’s likelihood of success on the merits.”

At the heart of the objections to Tribune’s bid is that it is already the owner of the Los Angeles Times and San Diego Union-Tribune.

Tribune Publishing spokeswoman Hillary Manning said the Justice Department did not understand the modern newspaper industry.

“We believe the Antitrust Division continues to overlook the commercial realities of modern media in which Internet-delivered services are aggressively competing with the newspaper industry,” Manning said.

“The practical effect of the order will be to force Freedom’s newspapers into the hands of an alternative bidder that will be less able to reduce cost and achieve efficiencies, with the likely effect that the journalism serving the local communities will be diminished.”

Lawyers will return to court this afternoon to possibly wrap up the bid process, presumably awarding Freedom Communication assets to DFM unless Tribune can get a court order delaying the ruling

But this isn’t the end of the story by a long shot. Digital First Media is not exactly in great financial shape, having gone through its own series of bankruptcies. The company was almost sold to a private equity firm last year, and there is always talk of DFM selling off assets to shore up its finances. Further, if making sure the quality of journalism is maintained at the Register is such an important issue, then handing the property to Digital First Media, which recently shutdown local papers in Northern California, makes no sense at all other than that they were the second place bidder.

The week did not end well for Nick Denton and Gawker Media, as a Florida jury returned a $115 million judgment for the gossip website’s posting of a sex tape of Hulk Hogan with Heather Clem, the ex-wife of shock jock Bubba the Love Sponge Clem (who shot the tape). Now the jury returns today to decide whether there should be punitive damages awarded, as well.

(Update: Things go from bad to worse for the media guys: the jury awarded $25M in damages – $15M from Gawker Media, $10M out of Denton’s personal bank account, and former Gawker editor A.J. Daulerio was ordered to pay $100,000. That’s $100K Daulerio probably doesn’t have.)

Gawker Media plans, of course, to appeal the verdict.

Nick Denton trial screen“Given key evidence and the most important witness were both improperly withheld from this jury, we all knew the appeals court will need to resolve the case,” Gawker said in a statement. “I want to thank our lawyers for their outstanding work and am confident that we would have prevailed at trial if we had been allowed to present the full case to the jury. That’s why we feel very positive about the appeal that we have already begun preparing, as we expect to win this case ultimately.”

Denton seemed to know thing would not turn out well. Gawker Media had sold a minority stake in the company to Columbus Nova Technology Partners in preparation for the Hogan trial. Now they will hope that on an appeal a judge will either cut the award of eliminate it altogether. If not, Gawker will likely have to shutter.

“Jurors and ordinary American citizens are fed up with out-of-control media that seem to believe that once the title of “newsworthy” is arbitrarily attached to an event or a person, the First Amendment will protect the publication of even the most salacious and offensive material that can be dredged up by sifting through celebrity mud,” said Paul Callan, a CNN legal analyst.

Apple will hold an event today at its campus in Cupertino, with a new small iPhone, a revamped iPad and new Apple Watch bands expected to be unveiled. The tech press will be working overtime trying to muster up enthusiasm for the product offerings. But as only the most sycophantic of the media have been invited to this small event, one can expect more than a few oohs and aahs.

Meanwhile, what the hell is going on with Apple News? Last week publishers accepted into the program were informed that they could now use the Apple News Format inside the app, but news stories submitted ended up going into an approval process that appears to have no end. The result, at least for TNM, is that no new articles have appeared inside the app for a week.

No matter, readership inside Apple News is so low as to be meaningless anyways. Once again, Apple finds a way to piss off publishers.

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