This is, I guess, the final shoe dropping from the unfortunate Aaron Kushner era at the Orange Country Register. The newspaper's parent company, Freedom Communications, filed Sunday for bankruptcy as part of a move by CEO and publisher Rich Mirman to acquire the company. Mirman, you may recall, was the Nevada gambling executive brought in last year to salvage the wreckage of Kushner's optimism-based strategy for the Register. Mirman says in the Register story that he has moved to Orange County and become a newspaper believer (as Kushner was.) “I’ve caught the bug of what news journalism can do in its community,” Mirman said. “I’m very intrigued by translating what we do into a long-lasting business. There are ways to make money in new and innovative ways.”
According to Mirman, the Register expects to turn a profit in 2015 after losing more than $40 million in the previous two years. Those years include the launch and brief life of the Los Angeles Register. The Register story says the bankruptcy would lead to an auction at which anyone, including other Orange County interests or the Los Angeles Times, might be a bidder for the paper. From the Register:
Mirman and his team hope the bankruptcy, Freedom’s second filing in six years, will retool large debts incurred since Boston investors Aaron Kushner and Eric Spitz bought the company three years ago. The plan would end Kushner’s ownership stake in Freedom; Spitz will remain an investor and company chairman.
Mirman said he expects the bankruptcy case to have no impact on the day-to-day operations of the newspapers. Staffing will remain steady. Payments to employees, key vendors and partners will continue….
“We’re turning the page and starting a new chapter,” Mirman said. “We’ve gone through a few rocky years and we need to redefine ourselves.”
From the New York Times coverage:
The filing is the just the latest tumult for the media industry in general, and Southern California’s newspaper market in particular. Several other newspapers have been forced into bankruptcy in recent years, including the owner of The Los Angeles Times, the Tribune Company.
This is the second time in six years that Freedom has turned to bankruptcy court for protection.
The family-owned company filed for bankruptcy in 2009 before being taken over by a group of hedge funds. The new owners soon began selling off some of the company’s varied assets and dismantling the media conglomerate. In 2012, a savior seemed to arrive in the form of two Boston investors, Aaron Kushner and Eric Spitz, who promised to refocus on newspapers and reinvest in the company. They bought Freedom for about $50 million and assumed about $110 million in pension obligations and began an ambitious expansion. But the strategy failed and losses grew, followed by deep cuts in staff and budgets.
A tidbit from the LA Times story:
The move is the latest episode in the turmoil that has beset the newspaper market in Southern California, where civic leaders have urged a return to local control at the Los Angeles Times after its Chicago-based owner fired Times publisher Austin Beutner in September….
“I am confident our bid will be successful, and the company will emerge with a solid financial foundation and well-positioned for future success,” Mirman, a former casino marketing executive, told employees in a letter. “The goal is to strengthen our position as the leader in providing local news and information for Orange, Riverside and San Bernardino counties.”
Others, however, could emerge as bidders, including Tribune Publishing, owner of the L.A. Times, media consultant Alan Mutter said. Tribune has made acquiring newspapers in nearby markets a stated goal and in May, it purchased the San Diego Union-Tribune and, with The Times, formed the California News Group.
“I always thought it would be a possibility that the Los Angeles Times would want to integrate all the papers from L.A. to San Diego,” Mutter said.