Orange County Register.
New Tribune Publishing boss Michael Ferro wasn't going to be out-bid for Freedom Communications and its two newspapers, the Orange County Register and the Press-Enterprise in Riverside. Tribune bid $56 million to acquire the company, outbidding Digital First Media and a group led by Register executives.
What happens now is unclear. Yesterday's auction results go before a bankruptcy court judge on Monday, with some talk of a protest over the proceedings. Then there is the threat of antitrust objections from the U.S. Justice Department over Tribune becoming the sole newspaper owner in Orange County, especially when it also owns the Los Angeles Times and, to the south, the San Diego Union-Tribune.
The auction process itself sounded raucous, not getting started until after 7 p.m. following back and forth negotiations. "Local investors walk out as auction for OC Register, Press-Enterprise erupts into all-day battle," reads the headline in the Register.
A three-way bankruptcy auction for The Orange County Register and The Press-Enterprise turned into a major legal tussle on Wednesday, with an investor group led by Freedom Communications CEO Rich Mirman leaving the bidding after all-day negotiations stalled the auction’s start.
As the bidding was to start – after lengthy delays – Mirman’s investor group was told it had to add $5 million in cash for creditors to waive the right to sue the group’s principal players – Mirman, Freedom Chairman Eric Spitz and Santa Ana developer Michael Harrah, according to Shulman.
“It was an irregular and unreasonable request over bogus claims,” Shulman said.
For Tribune, the winner, it's a chance to dominate Southern California news publishing and save money at the Register by consolidating some functions with the Times (and possibly the U-T.)
“The successful bid for the business of Freedom Communications will allow the Orange County Register and the Press-Enterprise to continue providing a distinct local voice in their communities and deliver premium news and information to consumers across Southern California,” said Justin Dearborn, CEO of Tribune Publishing, in a press release from the company.
From the LA Times story:
If the $56-million cash purchase of Freedom Communications is approved at a hearing in bankruptcy court on Monday, it would mark a deep expansion in Southern California for Tribune Publishing Co.
The company, which last year bought the San Diego Union-Tribune, is looking to extend its reach in Southern California and save money by streamlining some business operations at a time when newspapers struggle to remain profitable.
If the government seeks to block the deal, Tribune may argue that the government’s concerns are rooted in a lack of understanding about today’s newspaper industry, said Daniel Lazaroff, professor emeritus at Loyola Law School.
He noted that consumers and advertisers have more choices today than decades ago, including websites and cable news stations. “If this was 25, 30 years ago, the anti-competitive potential would be much greater,” he said.
A Tribune Publishing spokeswoman said the company is prepared to defend the legality of the sale.